The stock markets in the United States climbed for the sixth consecutive day, which was primarily driven by the positive momentum of corporations in the pharmaceutical industry amidst more than $70 billion in takeover proposals worldwide.
According to Bloomberg, health care stocks listed in the S&P 500 recorded the highest gain of 1.4% compared with 10 main industries trading in the index.
James Abate, chief investment officer at Centre Asset Management said, “We wouldn’t be surprised if you saw a significant rally through the end of the year. There’s been a leadership change towards higher-quality, mostly stable companies.”
On the other hand, Michael James, managing director of equity trading at Wedbush Securities opined that investors’ sentiment became too negative, and some of the decent earnings results started to help the market. He added that the combination of decent earnings and positive deal talk as well as the chatter in health care “gives better tone to the market overall and certainly some support.”
- Dow Jones Industrial Average (DJIA)- 16,54.37(+0.40%)
- S&P 500- 1,879.55 (+0.41 %)
- NASDAQ- 4,161.46 (+0.96%)
- Russell 2000- 1,155.48 (+1.15%)
- EURO STOXX 50 Price EUR- 3,199.69 (+1.39%)
- FTSE 100 Index- 6,681.76 (+0.85%)
- Deutsche Borse AG German Stock Index DAX- 9,600.09 (+2.02%)
Asia Pacific Markets
- Nikkei 225- 14,388.77 (-0.85%)
- Hong Kong Hang Seng Index- 22,730.68 (-0.13%)
- Shanghai Shenzhen CSI 300 Index- 2,196.80 (+0.44%)
Stocks in Focus
Allergan, Inc. (NYSE:AGN) gained more than 15% to $163.65 per share after receiving a proposal to be acquired by Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and activist investor Bill Ackman, its largest stockholder for $45.7 billion in cash and stock.
In a statement, Valeant’s CEO J. Michael Pearson said, “This proposal represents an undeniable opportunity to create extraordinary value for both Allergan and Valeant shareholders by establishing an unrivaled platform with leading positions in ophthalmology, dermatology, aesthetics, dental and the emerging markets.” The shares of Valeant Pharmaceuticals Intl Inc (NYSE:VRX) climbed 6.87% to $134.67 per share.
The stock price of GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK) rose more than 4% to $55.32 per share on reports that Novartis AG (ADR) (NYSE:NVS) (VTX:NOVN) will acquire its cancer drug business for $16 billion. GlaxoSmithKline also agreed to purchase the vaccine business of Novartis for $7.1 billion.
As part of the transaction, the two pharmaceutical companies will be establishing a $10.9 billion consumer-products company to sell a range of products from Excedrin pills to Sensodyne toothpaste. The new consumer products company will be majority owned by GlaxoSmithKline. The shares of Novartis AG (ADR) (NYSE:NVS) (VTX:NOVN) climbed 1.29% to $86.56 per share.