Benchmarks finished mixed yesterday following merger and
acquisition news, disappointing corporate results and dismal
economic data. While news about a business acquisition boosted
investors' confidence in markets, dismal economic data was
overlooked as an outcome of the bitter winter season. However,
while S&P 500 and Nasdaq settled in the green, Dow closed in
negative territory following Coca Cola's dismal results. Nasdaq
has now gained for eight straight sessions.
For a look at the issues currently facing the markets, make sure
to read today's
Ahead of Wall Street
The Dow Jones Industrial Average slipped 0.05% to close the
trading session at 16,146.81. The Standard & Poor 500
(S&P 500) managed gains of about 0.2% to move up to 1,841.52.
The tech-laden Nasdaq Composite Index rose roughly 0.7% to finish
Tuesday's trading session at 4,273.29. The fear-gauge CBOE
Volatility Index (VIX) added 2.2% to settle at 13.87. Total
volume on the New York Stock Exchange was 3.4 billion. Advancers
beat the decliners on the NYSE; as for 64% stocks that gained,
33% stocks closed in the red.
Tuesday was the first trading day this week as markets were
closed on Monday due to President's Day holiday. Coming back from
the long weekend, investors had to focus on a mixed bag of news
that included corporate news, results as well as economic data.
Actavis plc (NYSE:
) said it will acquire Forest Laboratories Inc. (NYSE:
) for $25 billion in cash and stock. The news bolstered shares of
Forest Laboratories by 27.5% while Actavis' shares were up 5%.
The merger of the Irish generic drug maker Actavis with US
specialty pharmaceuticals company Forest Laboratories will be one
of the biggest mergers in specialty pharma. The merged entity is
expected to have annual sales worth about $15 billion.
Gains in Forest Laboratories led the race among the S&P 500
stocks. Separately, other pharma stocks also closed with decent
gains and included the likes of Mylan, Inc. (NASDAQ:
), Teva Pharmaceutical Industries Limited (NYSE:
), Merck & Co. Inc. (NYSE:
) and Bristol-Myers Squibb Company (NYSE:
). These stocks were up 4.8%, 3.4%, 0.5% and 0.5%, respectively.
Meanwhile, shares of Tesla Motors, Inc. (NASDAQ:
) soared to a historic high yesterday on reports that Apple Inc.
) may buy this electric car maker. Tesla's shares closed with
gains of 2.8% yesterday, while Apple rose 0.4%.
While Forest Laboratories was the best performer in S&P 500
and largely helped the index finish in the positive zone, The
Coca-Cola Company (NYSE:
) was a big drag on the Dow. Shares of Coca-Cola dropped 3.8%,
with the company emerging as the biggest laggard among 30 Dow
components, after reporting dismal fourth quarter performance.
Its adjusted earnings of 46 cents a share were in line with
expectations, but sales declined 4% year on year. Sales for 2013
were down 2% and also lagged expectations.
Investors also had to digest a couple of dismal economic report.
A bitter winter season was blamed for all the poor economic
activity. The National Association of Home Builders/Wells Fargo
said U.S. homebuilders' confidence slumped in February. The
sentiment gauge was down to 46 in February from January's reading
of 56. This was the largest decline since NAHB started reporting
the gauge in 1985.
The monthly survey of manufacturers in New York State by the
Federal Reserve Bank of New York also showed dismal readings.
General business conditions dropped 8 points to 4.5 in February
and new orders dropped to zero. Unfilled orders index was stable
Benchmark's mixed finish on Tuesday comes after they closed with
second consecutive weekly gains last week. Both Dow and S&P
500 were up 2.3% for the week. Nasdaq closed the week with gains
of 2.9%. Much of the weekly gains came on the back of optimism
offered by Federal Reserve Chairwoman Janet Yellen. Her
pledge to keep interest rates low led benchmarks sharply higher
last week. In her first speech before Congress after taking up
the top position at the central bank, Yellen also supported the
APPLE INC (AAPL): Free Stock Analysis Report
ACTAVIS PLC (ACT): Free Stock Analysis Report
BRISTOL-MYERS (BMY): Free Stock Analysis
FOREST LABS A (FRX): Free Stock Analysis
COCA COLA CO (KO): Free Stock Analysis Report
MERCK & CO INC (MRK): Free Stock Analysis
MYLAN INC (MYL): Free Stock Analysis Report
TEVA PHARM ADR (TEVA): Free Stock Analysis
TESLA MOTORS (TSLA): Free Stock Analysis
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