Benchmarks ended in the green as gains in biotech stocks offset
discouraging retail sales numbers. Disappointing retail sales also
negated concerns about a sooner-than-expected interest rate hike.
Healthcare and technology stocks helped the S&P to hit a
two-week high. However, disappointing earnings from Macy's eroded
some of yesterday's gains.
For a look at the issues currently facing the markets, make sure to
Ahead of Wall Street
The Dow Jones Industrial Average (DJI) rose 0.6%, to close at
16,651.80. The Standard & Poor 500 (S&P 500) increased 0.7%
to close at 1,946.72. The tech-laden Nasdaq Composite Index closed
at 4,434.13; rising 1%. The fear-gauge CBOE Volatility Index (VIX)
declined 8.7% to settle at 12.90. A total of 4.7 billion shares
were traded on Wednesday, lower than the five-day average of 5.7
billion. Advancers outpaced declining stocks on the NYSE. For 72%
stocks that advanced, 25% declined.
Shares of InterMune, Inc. (
) surged 14.4% on news that some of the biggest European pharma
companies, such as Sanofi (
) and Roche Holding AG, have offered takeover bids for the U.S.
biotech company. The Goldman Sachs Group, Inc. (
) and Centerview Partners LLC have been reportedly assisting
InterMune with the bids. This was the highest intra-day gain for
the company since Oct 2000.
Gains in InterMune and Jazz Pharmaceuticals Public Limited Company
), which soared 8.8%, boosted the biotech sector. This in turn
helped the Nasdaq move upward. Key biotech stocks such as Gilead
Sciences Inc. (
), Vertex Pharmaceuticals Incorporated (
), Biogen Idec Inc. (
) and Regeneron Pharmaceuticals, Inc. (
) increased 0.7%, 3.9%, 3% and 1.5%, respectively.
Separately, Amazon.com Inc.'s (
) shares gained 2.2% after launching a new mobile payment service.
ChannelAdvisor Corp. also reported a 40% jump in Amazon's
On the economic front, the U.S. Department of Commerce reported
that July retail sales remained almost flat owing to slowing car
demand and lower wage growth. It also missed the consensus estimate
of a 0.2% gain. This was the worst retail sales reading in the last
six months. However, July sales increased 3.7% year over year. The
dismal report adversely affected the retailers. Nonetheless,
investors grew hopeful that dismal data will deter the Fed from
raising rates earlier than forecasted.
Markets witnessed a series of disappointing earnings results
yesterday. Macy's, Inc. (
) reported second quarter earnings per share of 80 cents, missing
the Zacks Consensus Estimate of 86 cents, as discounts affected
profit margins. The company also reported revenues of $6,267
million, short of the Zacks Consensus Estimate of $6,294 million.
Macy's also lowered its fiscal 2014 comparable-store sales growth
guidance from 2.5%-3% to 1.5%-2%. Shares of Macy's declined 5.5%.
Shares of King Digital Entertainment plc (
) plunged 23.1% on weak revenues and lackluster guidance for fiscal
2014. The company reported second quarter revenues of $593.5
million, lower than the Zacks Consensus Estimate of $618 million.
The Health Care Select Sector SPDR ETF (XLV) was the biggest gainer
among the S&P 500 sectors. The sector gained 1.2%. Key
healthcare stocks from the sector such as Celgene Corporation (
), Alexion Pharmaceuticals, Inc. (
), UnitedHealth Group Incorporated (
) and Merck & Co. Inc. (
) rose 2.3%, 2.1%, 1.6% and 1.4%, respectively. All S&P 500
sectors gained on Wednesday.
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INTERMUNE INC (ITMN): Free Stock Analysis
SANOFI-AVENTIS (SNY): Free Stock Analysis
GOLDMAN SACHS (GS): Free Stock Analysis Report
JAZZ PHARMACEUT (JAZZ): Free Stock Analysis
AMAZON.COM INC (AMZN): Free Stock Analysis
MACYS INC (M): Free Stock Analysis Report
KING DIGITL ENT (KING): Free Stock Analysis
GILEAD SCIENCES (GILD): Free Stock Analysis
BIOGEN IDEC INC (BIIB): Free Stock Analysis
VERTEX PHARM (VRTX): Free Stock Analysis Report
REGENERON PHARM (REGN): Free Stock Analysis
CELGENE CORP (CELG): Free Stock Analysis Report
ALEXION PHARMA (ALXN): Free Stock Analysis
UNITEDHEALTH GP (UNH): Free Stock Analysis
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