Wall Street suffered from whiplash Monday as a pair of mergers in the pharmaceutical sector and bullish economic data mixed with heavy selling in internet and momentum stocks, causing equities to erase, then regain early morning gains.
After selling off midday on weakness tied to the Nasdaq Composite, stocks mostly recovered late in the day as technical support at the 50-day moving average in the Dow Industrials and S&P 500 triggered a rebound in the major indices. The Nasdaq Composite ended near even.
M&A Driven
The $100 billion offer by Pfizer Inc. (NYSE:PFE) for the U.K.'s Astrazeneca Plc. (AZN) was the catalyst for an opening rally, but a slew of other mergers were also supportive of the firmer tone. Forest Labs put up as much as $1.5 billion for Furiex Pharmaceuticals Inc. (FURX.O) and General Electric Company (NYSE:GE) expressed interest in France's Alstom (ALSO.PARIS) SA's turbine division.
But while blue-chips and small caps were advancing on the heels of stronger than expected housing data, the Nasdaq Composite was back in the red as a result of heavy pressure on internet and momentum stocks like Facebook Inc (NASDAQ:FB) and Tesla Motors Inc (NASDAQ:TSLA). The feeding frenzy in the tech sector spilled into the broader markets erasing early gains. Fortunately, bears were unable to muscle the Dow and S&P below their respective 50-day moving averages, forcing shorts to cover, leading to a higher close.
Monday's market-friendly data included a 3.4% gain in pending home sales for March, the first increase in nine months, and well above estimates for a 0.6% gain.
Also, the Dallas Federal Reserve said manufacturing activity improved significantly in the region with their index climbing to 11.7 in April, nearly double estimates, and a big leap from 4.9 the month prior.
Here's Where The Markets Stood At The Close
US MARKETS
- Dow Jones Industrial Index was up 87 (+0.5%) at 16,448
- S&P 500 was up 6 (+0.3%) at 1,869
- Nasdaq Composite Index was down 1 (-0.03%) at 4,074
GLOBAL SENTIMENT
- FTSE 100 was up 0.22%
- Nikkei 225 was down 0.98%
- Hang Seng Index was down 0.41%
- Shanghai China Composite Index was down 1.62%
UPSIDE MOVERS
- (+) FURX Offered $1.5 bln from Forest Labs (FRX), also plans to present data on treatment for irritable bowel syndrome
- (+) JCP Consumer report citing gains among department stores
- (+) AZN Pfizer (PFE) offers $100 bln
DOWNSIDE MOVERS
- (-) OZM Evidence suggesting the company helped finance controversial African oil and mining deals.
- (-) RUBI Gets mixed analyst ratings after IPO
- (-) ATHX Interim results from the Phase 2 clinical study of the administration of MultiStem cell therapy failed to show meaningful benefit
After Hours Stock News From Midnight Trader.
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