Stocks extended their rally to a sixth day, drifting off their best levels in afternoon trade and led by broad gains for healthcare stocks following a $28.5 million asset swap between Novartis AG (NYSE:NVS), GlaxoSmithKline Plc. (NYSE:GSK), and Eli Lilly and Co. (NYSE:LLY). Market-friendly data along with strong earnings by Netflix (NASDAQ:NFLX) and Comcast (NASDAQ:CMCSA) and a positive outlook by McDonald's (NYSE:MCD) also kept the major market gauges on positive ground.
Big Deals
Deal-making among pharmaceutical companies helped propel healthcare stocks to a market-leading position Tuesday. In pair of transactions, NVS will sell most of its animal-health division to LLY for $5.4 billion while also selling most of its vaccines division to GSK for $7.1 billion. In return, NVS will pay up to $16 billion to acquire new cancer drugs from the other two firms.
Also Tuesday, AstraZeneca PLC. (AZN) slipped about 3% -- giving back a portion of Monday's 8% advance -- after reportedly rebuffing a $100 billion takeover offer by Pfizer (NYSE:PFE). Neither company has commented on the market rumors.
Tepid Data
Eearlier Tuesday, the Commerce Department reported existing home sales fell 0.2% in March to a seasonally-adjusted annual pace of 4.59 million, still better than the 0.8% drop the Street was expecting. Also, the Richmond Fed manufacturing index Tuesday reversed a 7.0 decline last month to record a 7.0-point rise in April, beating expectations for the index to rise to a 0.0 reading this month.
Commodities were mostly higher although crude oil for May delivery settled $2.24 lower at $102.13 per barrel in moderate profit-taking after the front-month contract hit a year-to-date high yesterday. May natural gas was up 4 cents to finish at $4.74 per 1 million BTU. June gold fell $7.10 to $1281.10 per ounce while May silver added 2 cents to $19.36 per ounce. May copper settled a penny higher at $3.05 per pound.
Here's Where The U.S. Markets Stood At Day's End
- Dow Jones Industrial Average up 65.12 (+0.40%) to 16,514.37
- S&P 500 up 7.66 (+0.41%) to 1,879.55
- Nasdaq Composite Index up 39.91 (+0.97%) to 4,161.46
GLOBAL SENTIMENT
- Hang Seng Index down 0.13%
- Shanghai China Composite Index up 0.34%
- FTSE 100 Index up 0.85%
UPSIDE MOVERS
- (+) RCII, Posts Q1 EPS of $0.57 per share, ex items, beating the Capital IQ consensus by $0.02 per share. Revenue rose 1.7% year over year to $833 million, narrowly trailing the Street view by $7.77 million.
- (+) CNC, Per-share Q1 net income of $0.57 bests Capital IQ consensus by $0.12 per share. Revenue rose 31.9% year over year to $3.35 billion, exceeding expectations by around $100 million.
- (+) NFLX, Q1 adjusted earnings of $0.86 per share top estimates by $0.04. Revenue climbs 24.0% year over year to $1.27, matching consensus. Projected Q2 EPs of $1.12, ex items, beats by $0.13 per share.
DOWNSIDE MOVERS
- (-) MDSO, Q1 earnings of $0.11 per share miss the Capital IQ consensus for Q1 by $0.05 per share. Revenue rose 21% over year-ago levels to $76.6 million, trailing the Street view by $2.95 million.
- (-) LXK, Forecasts 2% to 4% decline in revenue during the current quarter, resulting in adjusted earnings of $0.85 per share to $0.95 per share. Analysts are looking for Q2 EPS of $0.94 per share on $856.08 million in revenue.
- (-) BEBE, Warns of a steeper Q2 net loss than previous expected after cold weather in many parts of the U.S. hampered sales. Now expects $0.29 per share loss, $0.14 wider than the analyst consensus.
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