Markets
PFE

Stock Market News for October 22, 2015

Benchmarks ended Wednesday's volatile trading session in the red following declines in healthcare and energy shares. A negative report on Valeant Pharmaceuticals dragged healthcare stocks into negative territory, while a drop in oil prices weighed on energy shares. Oil prices fell on Wednesday following another increase in oil stockpiles. Meanwhile, investors continue to assess a slew of corporate earnings results.

For a look at the issues currently facing the markets, make sure to read today's Ahead of Wall Street article

The Dow Jones Industrial Average (DJI) declined 0.3% to close at 17,168.61. The Standard & Poor's 500 (S&P 500) dropped 0.6% to close at 2,018.94. The tech-laden Nasdaq Composite Index closed at 4,840.12, decreasing 0.8%. The fear-gauge CBOE Volatility Index (VIX) gained 6% to settle at 16.70. A total of around 6.8 billion shares were traded on Wednesday, lower than the last 20-sessions' average of 7.3 billion. Decliners outpaced advancing stocks on the NYSE. For 69% stocks that declined, 28% advanced.

Decline in healthcare stocks had a negative impact on the broader markets on Wednesday. Healthcare stocks took a beating after short selling firm Citron Research alleged revenue-recognition improperties by Valeant Pharmaceuticals International, Inc. ( VRX ). The short selling firm said that Valeant has an undisclosed tie up with Philandor and R&O Pharmacy Inc. These undisclosed ties up helped Valeant generate "phantom sales" of its products. Valeant was compelled to reveal the existence of Philandor until recently due to scrutiny on its accounting and distribution.

Citron Research even questioned whether Valeant is a "pharmaceutical Enron". Shares of Valeant tumbled as much as 40% on Wednesday, its biggest ever intraday drop. However, shares of the Canadian drug maker were able to recover some of the losses to end with a loss of $28.13 or 19%.

The Health Care Select Sector SPDR (XLV) declined 0.9%, the second highest among the S&P 500 sectors. Key holdings including Pfizer Inc. ( PFE ), Amgen Inc. ( AMGN ), UnitedHealth Group Incorporated ( UNH ), Bristol-Myers Squibb Company ( BMY ) and Medtronic plc ( MDT ) decreased 1.6%, 0.2%, 1.9%, 2.2% and 0.3%, respectively.

Meanwhile, energy shares declined due to drop in oil prices. A bigger build in crude oil stockpiles dragged down oil prices. The Energy Information Administration reported that U.S. crude oil inventories increased by 8 million barrels during the week ending Oct 16, 2015. This was way above analysts' forecast of oil inventories increasing by 3.9 million barrels. Prices of WTI crude oil and Brent crude oil declined 2.4% and 1.8% to $45.20 per barrel and $47.85 a barrel, respectively.

The Energy Select Sector SPDR (XLE) dropped 1.2% and was the biggest loser among the S&P 500 sectors. Dow components Exxon Mobil Corporation ( XOM ) and Chevron Corporation ( CVX ) declined 0.8% and 0.7%, respectively. Other key stocks from the energy sector including ConocoPhillips ( COP ), Kinder Morgan, Inc. ( KMI ) and Occidental Petroleum Corporation ( OXY ) decreased 1.1%, 1.6% and 0.8%, respectively. Overall, 9 out of 12 sectors of the S&P 500 ended in the red.

Meanwhile, investors kept an eye on quarterly earnings results. General Motors Company ( GM ) reported third quarter earnings per share of $1.50, beating the Zacks Consensus Estimate of $1.17. However, revenues for the reported quarter came in at $38.8 billion, marginally missing the Zacks Consensus Estimate of $39.1 billion. The Boeing Company ( BA ) also posted third quarter earnings per share of $2.52 that beat the Zacks Consensus Estimate of $2.22. Revenues for the reported quarter were $25.85 billion that also came in ahead of the Zacks Consensus Estimate of $24.74 billion. Shares of General Motors and Boeing advanced 5.8% and 1.7%, respectively.

On the other hand, shares of The Coca-Cola Company ( KO ) declined 0.2% after the beverage giant reported third quarter revenues of $11.43 billion that fell short of the Zacks Consensus Estimate of $11.61 billion. However, the company's earnings per share for the reported quarter came in at 51 cents that beat the Zacks Consensus Estimate by a cent.

Shares of Yahoo! Inc. ( YHOO ) also plunged 5.2% after the company posted third quarter revenues of $1.23 billion that missed the Zacks Consensus Estimate by 2.3%. Additionally, the company's net income for the quarter came in at $12.24 million, compared to the year-ago quarter's net income of $397.9 million.

Including these reports, about 105 S&P 500 members have reported third quarter earnings results so far. Earnings of these members are up 0.4% on 1.7% lower revenues, with 66% beating earnings per share estimates and 44.8% coming ahead of top-line expectations.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

VALEANT PHARMA (VRX): Free Stock Analysis Report

PFIZER INC (PFE): Free Stock Analysis Report

AMGEN INC (AMGN): Free Stock Analysis Report

UNITEDHEALTH GP (UNH): Free Stock Analysis Report

BRISTOL-MYERS (BMY): Free Stock Analysis Report

MEDTRONIC (MDT): Free Stock Analysis Report

EXXON MOBIL CRP (XOM): Free Stock Analysis Report

CHEVRON CORP (CVX): Free Stock Analysis Report

CONOCOPHILLIPS (COP): Free Stock Analysis Report

KINDER MORGAN (KMI): Free Stock Analysis Report

OCCIDENTAL PET (OXY): Free Stock Analysis Report

GENERAL MOTORS (GM): Free Stock Analysis Report

BOEING CO (BA): Free Stock Analysis Report

COCA COLA CO (KO): Free Stock Analysis Report

YAHOO! INC (YHOO): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

PFEAMGNBMYUNH

Other Topics

US Markets

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More