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Rally pushes U.S. stocks to 2015 gain

Pfizer to buy Hospira for $16 billion

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Pfizer to buy Hospira for $16 billion

U.S. stocks recorded solid gains on Thursday, buoyed by a rebound in oil prices, deal news and upbeat quarterly earnings, pushing the S&P 500 and Dow industrials into positive territory for the year.

A more than 4% jump in oil prices sent energy and materials sharply higher, while news that Pfizer plans to buy Hospira Inc. for about $16 billion lifted health-care sector stocks.

Better-than-expected earnings from companies, such as O’Reilly Automotive Inc. and Estée Lauder Cos. added to confidence.

The S&P 500 SPX, +1.03% closed 21 points, or 1%, higher at 2,062.50, with broad-based gains across all 10 main sectors. Some analysts pointed out that Friday’s move on the index will prove important, if it breaks through a key January resistance level of 2,064.

The Dow Jones Industrial Average DJIA, +1.20% jumped 212 points, or 1.2%, to 17,885, with all of its 30 components ending higher. Drug giant Pfizer led gains.

The Nasdaq Composite COMP, +1.03% ended the day up 48 points, or 1%, at 4,765. Biotechnology stocks rose sharply, with the iShares Nasdaq Biotechnology ETF gaining 2.4%.

Investors seemed to have momentarily dismissed Greek concerns, with the latest development being the European Central Bank’s decision to no longer accept Greek bonds as collateral. They also shrugged off a batch of mixed economic data. Weekly jobless claims came in stronger than expected, setting an optimistic tone for the key jobs report due on Friday. However, productivity in the fourth quarter shrank by a 1.8% annual pace. The trade deficit soared to a two-year high in December, mostly due to temporary oil-related shifts.

Gene Peroni, Jr., portfolio manager at Advisors Asset Management, said the stock market is focusing on better-than-expected earnings.

“We are seeing that growth stocks are outperforming and that leadership in the market is encouraging and indicates that this bull market will rise further,” Peroni said.

Peroni dismissed recent volatility and a weak performance in January. “Recent volatility is driven by hedge-fund activity, as seen by massive reallocation into growth stocks,” he added.

Carin Pai, portfolio manager at Fiduciary Trust, said stock markets are benefiting from oil prices stabilizing.

marketwatch