Stock Market News for November 19, 2014 – Zacks Investment …
Rally in healthcare stocks and easing global growth worries boosted benchmarks to finish in the green on Tuesday. Improved investor confidence data from Germany and positive news from Japan reduced worries about the global growth. Encouraging economic data also lifted investor confidence. The S&P 500 and Dow finished at a record high yesterday.
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) rose about 0.2% to close at 17,687.82. The Standard & Poor 500 (S&P 500) gained 0.5% to close at 2,051.80. The tech-laden Nasdaq Composite Index closed at 4,702.44; increasing 0.7%. The fear-gauge CBOE Volatility Index (VIX) decreased almost 1% to settle at 13.86. A total of about 6.1 billion shares were traded on Tuesday, lower than monthly average of 6.4 billion. Advancers outpaced declining stocks on the NYSE. For 59% stocks that advanced, 38% declined.
Healthcare stocks were boosted yesterday after Monday’s merger and acquisition news involving Actavis (ACT – Analyst Report) and Allergan Inc. (AGN – Analyst Report). On Monday, Actavis confirmed that it will be acquiring Botox maker Allergan in a cash and stock transaction valued at about $66 billion or $219 per share. Shares of Actavis and Allergan gained 8.7% and 2% on Tuesday, respectively. Actavis was the best performer among the S&P 500 companies yesterday.
The M&A news had a positive impact on the Health Care Select Sector SPDR (XLV). The sector gained 1.6% and was the biggest gainer among the S&P 500 sectors on Tuesday. Key healthcare stocks including Gilead Sciences Inc. (GILD – Analyst Report), Alexion Pharmaceuticals, Inc. (ALXN – Analyst Report), Covidien plc (COV – Analyst Report) and Pfizer Inc. (PFE – Analyst Report) rose 3.3%, 3%, 3.7% and 0.9%, respectively. All of the 10 S&P sectors registered gains on Tuesday.
Separately, the November survey from Germany’s ZEW Institute that measures sentiment of financial professionals like economists and investors came in better than expected on Monday. The November measure came in at 11.5 points, rebounding from the sharp drop of 3.6 points the month before. The measure also surpassed the consensus estimate of 0.9. The ZEW survey shows that while growth will likely be no materially better in the December quarter, sentiment has started looking up for the period beyond that.
Moreover, markets rallied after Japan’s prime minister Shinzo Abe announced delaying the second round of sales tax increase by 18 months. This comes after Japan’s economy unexpectedly slipped into temporary recession following back-to-back GDP contraction. He also announced snap elections to get a fresh mandate for continuing with his Abenomics policies. These news raised hopes about more effective stimulus in the economy.
In economic news, the Bureau of Labor Statistics reported that the Producer Price Index increased at a seasonally adjusted rate of 0.2% in October, in contrast to the consensus estimate of 0.1% decline. The increase was preceded by September’s decline of 0.1%.
Additionally, the NAHB/Wells Fargo Housing Market index gained 4 points to 58 in November from October’s reading. This was the fifth consecutive month in which the reading came in higher than the threshold level of 50. NAHB chief economist David Crowe stated: “Low interest rates, affordable home prices and solid job creation are contributing to a steady housing recovery.”
On the earnings front, shares of Urban Outfitters Inc. (URBN – Analyst Report) plunged 6.6% after posting third quarter earnings per share of 35 cents, missing the Zacks Consensus Estimate of 42 cents. The company also reported revenues of $814.5 million, lower than the Zacks Consensus Estimate of $818 million. Urban Outfitters was the worst performer among the S&P 500 companies.
The Home Depot, Inc.’s (HD – Analyst Report) shares declined 2.1% despite reporting better-than-expected third quarter earnings. Home Depot posted adjusted earnings per share of $1.15, beating the Zacks Consensus Estimate by a couple of cents.
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Stock Market News for November 19, 2014 – Zacks Investment …
