Ah, the folly of peace

Shire Pharmaceuticals believes its drugs scare is over. As did Shire investors, who pushed the group's share price up nearly 8% on Thursday.

Just last month, Canada suspended Shire's hyperactivity drug Adderall XR - following the sudden death of a number of patients. But according to Shire chief executive Matthew Emmens, the effect of the suspension on the American market has now 'basically levelled since then'. As a result, 'we think the scare is over', Emmens said.

Shire's stock shot up 42p to 604p - the biggest blue chip climber on Thursday. The blue chip index, however, failed to follow suit, falling 6 points to trade at 4,894, while the FTSE 250 gained 0.7% to close at 7,130. The FTSE Techmark also fell into the red, down by 1.3%. So what got into the Techmark stocks yesterday?

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Well, perhaps it had something to do with Irish drug group Elan, which saw its share price plummet over 55% yesterday. The plunge follows news that its multiple sclerosis treatment - forecast to make $3bn in two years - caused a rare neurological disease in a third patient.

Elan's MS drug has now been suspended, but the group's share price had already fallen from €20 to €6 in one day late-February. By closing time, it traded at €2.42.

There was also bad news for Compass Group yesterday, as the world's biggest caterer said its annual profits look set to take a £24m knock. Compass, which serves meals for clients from the Pentagon to school kids, shed 5% on Thursday.

In fact, Compass has not been helped by the exchanging of lucrative military catering contracts in the Middle East for slightly more mundane, and even lower margin, peacekeeping franchises in the region. Ah, the folly of peace...

And healthcare group Smith & Nephew fell just under 5% yesterday on news that the New Jersey attorney-general had subpoenaed it. According to the outfit, officials are currently investigating the links between US surgeons and joint implant makers. What more do we know? Not all that much...

'The motive behind the move is uncertain,' Numis analysts said yesterday. 'It is unclear as to the timing and what any likely next steps are, and whether any allegations will be brought against the company.

Oil resumed its bull trend. Dated Brent traded 5.5% up - or $2.8 a barrel - to trade at $52.98 by London's close. Nymex also shot over the $55 a barrel mark. Oil stocks also gained in accordance, with Premier Oil closing 4% up, while BG Group added 1%.

And Dana Petroleum added 2%, after reporting solid full-year figures and a 27% hike in turnover on Thursday. According to the group, it also made a fresh oil discovery in the Northern North Sea, while deep-water wells just off the coast of Mauritania and Kenya could each contain over 1bn barrel of oil for the group.

In other news, Nationwide said yesterday that monthly house price changes showed its largest decline in a decade, falling by 0.6%. As a result, annual house price inflation stumbled back into single-digits, also a first since 2001. Nationwide said that annual growth fell from 10.2% to 7.9%.

And in commodities news, the International Monetary Fund has reiterated that it could sell part of its gold reserves to help relieve the debt of poor countries...but without destabilising the market. Gold investors didn't believe the IMF the last time they said just that. The gold price plunged to four-month lows then, to trade at $413 an ounce early in February.

This time, however, gold traded 0.2% in the black on the news, at $427 per ounce. But if the gold is sold-off, will the prospect of a rise in the liquid gold supply have a negative long-term effect on the gold price?

That's unlikely, as gold's bull-run has hardly even started, we note in the latest MoneyWeek. Despite the potential sell-off, demand is still rising, while production continues to shrink. And global instability is generally also good news for the shiny stuff - as investors can turn to gold as a sturdy safe haven during tumultuous times.

In fact, during the last gold bull market, prices surged as high as $850 an ounce - against a backdrop of surging oil prices and a waning dollar. That was in 1980, but it sounds awfully familiar, don't you think?