October 3, 2022

A Breather for a Day, as Health Care Stocks Do the Heavy Lifting

Stocks changed little on Monday, pausing after hitting highs last week, though strength in health care shares helped keep declines in check.

The Dow Jones industrial average ended down 26.81 points, or 0.18 percent, at 15,091.68. The Standard Poor’s 500-stock index was very slightly up, by 0.07 point, at 1,633.77. The Nasdaq composite index was up 2.21 points, or 0.06 percent, at 3,438.79.

The S. P. 500 health care sector climbed 0.7 percent and was the day’s best performer.

Shares of the biopharmaceutical company Theravance jumped 17.9 percent, to $41.20, after the Irish drugmaker Elan agreed to a $1 billion deal to buy 21 percent of the royalties that Theravance receives from GlaxoSmithKline for its respiratory drugs.

Other big health sector gainers included Pfizer, up 2.3 percent, at $29.37; Gilead, up 3.1 percent, at $54.47; and Biogen Idec, up 4.5 percent, at $222.74. The day’s flat close came after a third straight week of gains on the major indexes, with both the Dow and S. P. 500 setting record closing highs last week. The S. P. 500 remains up 14.5 percent for the year so far.

While some analysts argue the long-term trend is still higher, many see momentum for stocks waning in the near term without more positive catalysts. Trading volume has been lighter than average, and volatility has been low in recent days.

“Intraday volatility has essentially been nonexistent. I think it means people are really sitting on the sidelines right now seeing which way it’s going to go,” said Uri Landesman, president of Platinum Partners in New York. He expects the rally to top out in the next two weeks.

The CBOE Volatility index, or VIX, a measure of market expectations and stability, ended down 0.3 percent.

Among the day’s declining issues, the fast-food chain operator Yum Brands fell 2 percent, to $68.92. After the market closed on Friday, Yum posted a steep decline in April sales in China.

Retail sales rose 0.1 percent in April, better than the 0.3 percent drop that had been expected and a return to growth after a decline in March, which helped buoy markets on Monday. Excluding autos, gasoline and building materials, core sales rose 0.5 percent. Retail sales account for about 30 percent of American consumer spending.

Investors are at odds over whether positive economic data can help the market rise further, or whether it will spell the end of the Federal Reserve’s monetary stimulus, which could derail the rally, said Joseph S. Tanious, global market strategist at J.P. Morgan Funds.

Other economic data released on Monday showed business inventories were unchanged in March for a second straight month, versus expectations of a 0.3 percent rise, suggesting that restocking could help second-quarter economic growth.

Earnings have been mostly better than expected. With 90 percent of the S. P. 500 having reported, 67.2 percent of companies topped earnings expectations, according to Thomson Reuters data. Only 46.9 percent have beaten revenue expectations, below the 52 percent average over the last four quarters.

Shares of the Israeli Internet company Perion Network listed in the United States surged 10.6 percent, to $13.94, after it posted quarterly earnings.

Volume was roughly 5.3 billion shares traded on the New York markets, well below the average daily closing volume of about 6.4 billion this year.

The price of the benchmark 10-year Treasury note fell 5/32 to 98 16/32, pushing the yield up to 1.92, from 1.90 on Friday.

Article source: http://www.nytimes.com/2013/05/14/business/daily-stock-market-activity.html?partner=rss&emc=rss

Wall Street Shrugs Off Death of Bin Laden and Turns Attention to Earnings

The three main indexes initially rose as investors tried to assess the future of global security. But shares lost their momentum as the session wore on.

“The Osama bin Laden situation really had a nice impact at the open,” said Douglas S. Roberts, the chief investment strategist for the Channel Capital Research Institute. “It looks like a lot of that might have been short-covering.”

Jeffrey Kleintop, the chief market strategist for LPL Financial, called the early rise a knee-jerk reaction.

“Then a thoughtful process comes out,” he said, “that maybe the risks have shifted.”

At the close, the Dow Jones industrial average was 3.18 points lower, at 12,807.36, while the broader Standard Poor’s 500-stock index lost 2.39 points, or 0.18 percent, to 1,361.22. The technology-heavy Nasdaq lost 9.46 points, or 0.33, percent, at 2,864.08.

The S. P. health care index was up more than 1 percent after Teva Pharmaceutical Industries said it had agreed to buy the biopharmaceutical company Cephalon for $6.8 billion, a deal unanimously approved by the boards of the two companies.

Teva shares rose more than 3 percent, to $47.27, while Cephalon was up more than 4 percent at $80.11.

The dollar was mixed. The euro rose to $1.4846 from $1.4806 late Friday, while the British pound slipped to $1.6683 from $1.6706. The dollar rose to 81.30 yen, from 81.20 yen.

The dollar has been weak across the board, with United States interest rates low and some central banks beginning to lift rates. Debt limit negotiations in Congress are not helping, said Brian Dolan, the chief currency strategist at Forex.com.

The Treasury Department said it would initiate emergency measures on Friday to keep the federal government’s total borrowing under the maximum allowed by law, as Congress continues to debate the terms of any increase in the debt ceiling.

“It is still a weak dollar environment,” Mr. Dolan said. “That is the significant takeaway: the dollar downtrend is very much intact.”

The Japanese and South Korean markets were already 1 percent higher before President Obama announced late Sunday that American forces had killed Bin Laden in Pakistan.

By the close, the Nikkei 225 index had gained 1.6 percent, to 10,004.20 points, the first time the index closed above 10,000 since the devastating earthquake and tsunami struck the country on March 11.

In Europe, the Euro Stoxx 50 index, a barometer of euro zone blue chips, slipped 0.1 percent. The CAC 40 in Paris rose 1.85 points and the DAX in Frankfurt rose 0.18 percent. London markets were closed for a bank holiday.

On the economic front, the Institute for Supply Management, a trade group of purchasing executives, said its index of manufacturing activity dipped to 60.4 in April but remained above 60 for a fourth month. That was down from 61.2 in March and 61.4 in February, the fastest expansion in nearly seven years. A reading above 50 signals growth.

In addition, construction spending rose 1.4 percent in March, helped by an increase in spending on home-improvement projects.

In other corporate news, Arch Coal said it would buy the International Coal Group in a cash deal worth $3.4 billion that will create one of the world’s largest coal producers. Arch shares fell 2.2 percent to $33.53, while International Coal rose more than 30 percent to $14.43.

Dish Network and the EchoStar Corporation have agreed to pay TiVo $500 million to settle a patent infringement lawsuit involving TiVo’s video recording technology, putting an end to a long and costly legal battle. Stock in TiVo rose more than 3 percent to close at $9.86.

Many analysts cautioned, however, that Bin Laden’s death could stoke, rather than ease, worries about oil supplies and global security in the longer run if it led to retaliatory attacks.

Energy stocks were lower. Crude oil slipped 41 cents to settle at $113.52 a barrel in volatile trading in New York.

Spot gold fell $18.35, to $1,545.35 an ounce.

Silver prices dropped more than 5 percent on Monday, a decline attributed to a decision by the CME Group, which is the parent of the Chicago Board of Trade, to increase the margins for futures trading on silver.

In the bond market, the benchmark 10-year bond gained 2/32, while the yield fell to 3.28 percent, from 3.29 percent late Friday.

David Jolly and Bettina Wassener contributed reporting.

Article source: http://www.nytimes.com/2011/05/03/business/03markets.html?partner=rss&emc=rss

Stocks Higher in Late Trading, Helped by Jobs Report

The ADP National Employment Report said 201,000 new private sector jobs were added in March. That is roughly in line with the 210,000 analysts had expected, but investors were encouraged by a strong gain in small-business hiring.

While not a huge surprise, the ADP report “helped the realization that things are not as bleak as they seemed a few weeks ago,” said Ryan Detrick, a strategist at Schaeffer’s Investment Research.

The report is seen as a precursor to the government’s March payrolls report due Friday, but the two reports do not always match. Traders are looking for any clues about how strong the job market is as they try to figure out how soon the Federal Reserve will start raising interest rates.

Cephalon surged 28 percent after Valeant Pharmaceuticals International offered to take over the biopharmaceutical company for $5.7 billion in cash. Valeant, based in Canada, rose 10 percent. The takeover bid is the latest in a string of deal-related news, another positive sign for investors.

“It shows that companies still think there are some good deals out there,” said Mr. Detrick. “If they are willing to pay a premium, that’s a good sign for the overall stock market.”

The Dow Jones industrial average rose 80 points, or 0.7 percent, to 12,359. The broader Standard and Poor’s 500-stock index rose 10 points, or 0.8 percent, to 1,329. The Nasdaq composite index rose 19 points, or 0.7 percent, to 2,776.

The yield on the 10-year Treasury note edged down to 3.46 percent from 3.49 percent late Tuesday.

The market plodded higher against a backdrop of unsettling international news. Concerns about European debt loomed as Portugal moved closer to needing a bailout and Spain’s central bank forecast a lower growth rate and higher deficit than previously predicted.

Seawater near Japan’s crippled nuclear plant tested at its highest radiation levels yet and the plant’s owner publicly acknowledged that four of six nuclear reactors would have to be decommissioned. In Libya, NATO forces initiated a new wave of airstrikes against forces loyal to Col. Muammar el-Qaddafi.

Article source: http://feeds.nytimes.com/click.phdo?i=1c878859562a1fadfe3e4bdf67a2003c

DealBook: Valeant Makes $5.7 Billion Hostile Bid for Cephalon

8:12 p.m. | Updated

Valeant Pharmaceuticals International offered to buy Cephalon for $5.7 billion in cash on Tuesday, kicking off a hostile bid for the biopharmaceutical company after weeks of discussions failed to produce a deal.

Under the terms of the offer, Valeant would pay $73 a share in cash, a 24 percent premium to Cephalon’s Tuesday closing price and a 29 percent premium to the company’s 30-day trading average.

Valeant also said that it would submit a proposal to replace Cephalon’s board with its own nominees.

J. Michael Pearson, Valeant’s chairman and chief executive, said in a telephone interview on Tuesday that his company is seeking to put its offer before Celaphon’s shareholders and let them decide. If the bid fails to garner much interest, Valeant will walk away, he said.

“We’re trying to be transparent with their shareholders,” Mr. Pearson said. “This is a really good way to find out whether shareholders would like to proceed or not.”

The hostile approach follows friendlier overtures by Valeant, a maker of a variety of neurology drugs and other treatments, for a deal. Valeant expressed interest in taking over Cephalon, which focuses on drugs that fight cancer and neurological disorders, as the latter company neared the expiration of several patents.

Cephalon’s board rejected those approaches each time.

On Friday, Valeant proposed an alternative to an outright takeover of Cephalon. Under the terms of the second plan, Valeant would pay $2.8 billion to buy Cephalon’s non-cancer businesses.

Mr. Pearson said that the alternative was devised to help jump-start possible negotiations, after having sit down with Cephalon’s chief executive, Kevin Buchi. The idea was to leave Cephalon with what it considered its core business.

But Mr. Buchi indicated this week that Cephalon’s directors would not be interested in a deal, prompting Valeant to make its offer public. One reason was that Valeant was unhappy with Cephalon’s announcing two deals to buy smaller drug makers, reducing its cash and making the target less attractive.

Cephalon said in a statement late on Thursday that it has received Valeant’s proposals and that its board is reviewing them.

Valeant said that its offer would be financed entirely with debt. As of the end of 2010, the company had about $3.5 billion in long-term debt.

Its adviser, Goldman Sachs, has said that the financing would be available, though it has not yet provided a formal commitment.

Cephalon is being advised by Deutsche Bank and the law firm Skadden, Arps, Slate, Meagher Flom.

Shares in Cephalon have fallen 19 percent in the last 12 months, closing on Tuesday at $58.75. Valeant’s stock has risen 5.4 percent over the same period, closing on Tuesday at $44.39.

Article source: http://feeds.nytimes.com/click.phdo?i=0fa942e2733b529f2461923d17d1cd27