US stocks sag; Teva bid for Mylan boosts pharma shares
This Oct. 2, 2014, photo shows a Wall Street sign adjacent to the New York Stock Exchange, in New York. US stocks mostly fell Tuesday, April 21, but the Nasdaq stayed in positive territory as Israel’s Teva announced a $40.1 billion cash-and-stock bid for generic drug maker Mylan. AP PHOTO/RICHARD DREW
NEW YORK–US stocks mostly fell Tuesday, but the Nasdaq stayed in positive territory as Israel’s Teva announced a $40.1 billion cash-and-stock bid for generic drug maker Mylan.
The Dow Jones Industrial Average closed down 85.34 points (0.47 percent) at 17,949.59.
The broad-based S&P 500 slipped 3.11 points (0.15 percent) to 2,097.29.
But helped by Mylan’s 8.9 percent surge, the tech-rich Nasdaq Composite added 19.50 (0.39 percent) at 5,014.10.
Teva’s cash-and-stock bid for Mylan would quash Mylan’s own offer earlier this month to acquire Perrigo for $28.9 billion.
Article continues after this advertisementMylan shares surged 8.6 percent and Teva gained 2.7 percent, while Perrigo slipped 2.0 percent.
Article continues after this advertisementFurther spicing up the pharma deals pot, after the markets closed Tuesday Perrigo’s board rejected Mylan’s bid as too low.
The Teva move sparked gains in other large pharma stocks: Merck added 0.4 percent, Novartis ADRs 1.8 percent, Amgen 1.5 percent, Bristol-Meyers Squibb 1.4 percent, Abbott Labs 1.1 percent, and AstraZeneca 1.6 percent.
Biotech giant Gilead soared 4.5 percent.
On the other hand, the strong dollar dealt a blow to fresh first-quarter results and appeared to impact a broader base of global firms.
Dow member DuPont shares lost 3 percent after it cut its full-year outlook as it raised the expected hit to earnings from currency shifts. The stronger dollar took 25 cents off first-quarter earnings per share, which came in at $1.34, close to expectations.
Iconic motorcycle maker Harley-Davidson cut its prediction for shipments this year, in part due to currency shifts, sending its shares down 9.8 percent.
Following suit on the blue-chip Dow, GE dropped 1.5 percent, McDonald’s–which reports on Wednesday–fell 1.4 percent, and IBM lost 1.1 percent.
Bond prices fell. The yield on the 10-year US Treasury rose to 1.92 percent from 1.88 percent Monday, while the 30-year advanced to 2.59 percent from 2.55 percent. Bond prices and yields move inversely.
