Benchmarks ended higher on Tuesday boosted by
better-than-expected corporate results. Comcast, Harley-Davidson,
Netflix, Travelers and United Tech posted upbeat quarterly
earnings. New deals in the health care sector also contributed to
the bullish sentiment. A modest fall in existing home sales data
in March hardly impacted the benchmarks.
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) gained 0.4% to close
Tuesday's trading session at 16,514.37. The Standard & Poor
500 (S&P 500) too rose 0.4% to finish at 1,879.55. The
tech-laden Nasdaq Composite Index went up almost 1% to 4,161.46.
The fear-gauge CBOE Volatility Index (VIX) dropped 0.5% to settle
at 13.19. Total volume for the day was roughly 5.88 billion
shares, lower than this month's average of 6.70 billion.
Declining stocks were outnumbered by advancing stocks on the
NYSE. For 26% stocks that declined, 71% advanced.
The day's encouraging quarterly results had a positive impact on
the broader markets. Comcast Corporation (NASDAQ:
) reported strong financial results for the first quarter of
2014. The telecommunications company reported quarterly adjusted
earnings per share of 68 cents, outpacing the Zacks Consensus
Estimate of 64 cents. Growth in its high-speed internet and
business services units boosted earnings.
Harley-Davidson, Inc. (NYSE:
) posted a 22.2% year-over-year rise in earnings to $1.21 per
share in the first quarter of 2014 from 99 cents in the year-ago
quarter. Earnings also surpassed the Zacks Consensus Estimate of
$1.08 per share.
Netflix, Inc.'s (NASDAQ:
) first quarter 2014 earnings of 86 cents a share outpaced the
Zacks Consensus Estimate of 83 cents per share. The earnings
growth is attributable to higher-than-forecasted new subscriber
growth. Netflix added 4 million new subscribers in the first
quarter, above the projected 3.85 million.
The Travelers Companies, Inc. (NYSE:
) posted first quarter 2014 earnings per share of $2.95, beating
the Zacks Consensus Estimate of $2.13 per share by 38%. Moreover,
earnings improved 28% year over year.
United Technologies Corp. (NYSE:
) reported earnings from continuing operations of $1.32 per
share, more than the Zacks Consensus Estimate of $1.27 per share.
However, first quarter 2014 earnings were less than year-ago
quarter earnings of $1.39 per share due to restructuring costs.
After the closing bell, AT&T, Inc. (NYSE:
) reported first quarter earnings that were in line with the
Zacks Consensus Estimate.
Shares of Comcast, Harley-Davidson, Netflix, Travelers Companies
and United Technologies increased 1.9%, 6.4%, 7.0%, 0.6% and
News on the mergers and acquisition front also boosted investor
sentiment. Allergan Inc.'s (NYSE:
) shares surged 15.3% after Canadian drug maker Valeant
Pharmaceuticals International, Inc. (NYSE:
) along with activist investor Bill Ackman announced an
acquisition bid. Valeant offered a merger for $48.30 in cash and
0.83 shares of Valeant for each share of Allergan. Shares of
Valeant rose 7.5%.
Meanwhile, another healthcare sector deal, between Swiss
pharmaceutical company Novartis AG (NYSE:
) and Britain's GlaxoSmithKline plc (NYSE:
) was another highlight of the day. Novartis has agreed to sell
its vaccines unit to Glaxo for $5.25 billion. This will make
Glaxo the world leader for vaccines in terms market share. At the
same time, Glaxo agreed to sell its portfolio of marketed cancer
drugs to Novartis for $16 billion. Shares of Novartis and Glaxo
rose 1.3% and 4.1%, respectively.
Separately, Eli Lilly and Company (NYSE:
) also announced its intention to acquire Novartis' animal health
division for $5.4 billion in an all-cash transaction.
The Health Care Select Sector SPDR (XLV) led the gains among the
S&P 500 sectors. The sector rose 1.1%. Key stocks from the
sector such as Johnson & Johnson (NYSE:
), Pfizer Inc. (NYSE:
), Merck & Co. Inc. (NYSE:
), Gilead Sciences Inc. (NASDAQ:
) and Bristol-Myers Squibb Company (NYSE:
) increased 0.2%, 0.5%, 0.9%, 1.8% and 0.9%, respectively.
Overall, 8 out of 10 sectors of the S&P 500 ended in the
On the economic front, existing home sales data released by
National Association of Realtors decreased to a seasonally
adjusted annual rate of 4.59 million units in March from 4.60
million units in February. However, the decrease was less than
the consensus estimate of a decrease of 4.57 million units.
ALLERGAN INC (AGN): Free Stock Analysis
COMCAST CORP A (CMCSA): Free Stock Analysis
GILEAD SCIENCES (GILD): Free Stock Analysis
GLAXOSMITHKLINE (GSK): Free Stock Analysis
HARLEY-DAVIDSON (HOG): Free Stock Analysis
JOHNSON & JOHNS (JNJ): Free Stock Analysis
LILLY ELI & CO (LLY): Free Stock Analysis
MERCK & CO INC (MRK): Free Stock Analysis
NETFLIX INC (NFLX): Free Stock Analysis
NOVARTIS AG-ADR (NVS): Free Stock Analysis
PFIZER INC (PFE): Free Stock Analysis Report
AT&T INC (T): Free Stock Analysis Report
TRAVELERS COS (TRV): Free Stock Analysis
UTD TECHS CORP (UTX): Free Stock Analysis
VALEANT PHARMA (VRX): Free Stock Analysis
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