Wall Street's holiday rally stumbled yesterday, with stocks finishing mixed as investors worried over the strength of the pharmaceutical sector. Another merger, between a pair...
NEW YORK Wall Street’s holiday rally stumbled yesterday, with stocks finishing mixed as investors worried over the strength of the pharmaceutical sector. Another merger, between a pair of regional utilities, buoyed confidence in the overall economy and pushed blue chips higher.
The Dow Jones industrial average rose 11.68 to 10,661.60. The blue chips were up more than 70 points in morning trading.
Microsoft, one of the 30 Dow stocks, slipped a penny to close at $26.95 a share. Boeing, also a Dow stock, added 12 cents to $53.22.
Broader stock indicators were narrowly mixed. The Standard & Poor’s 500 index was up 0.45 at 1,194.65, and the Nasdaq composite index fell 7.35 to 2,127.85.
Most Read Stories
- Family of girl snatched by sea lion lambasted for ‘reckless behavior’ WATCH
- I didn’t get it right with Seahawks’ Michael Bennett, and I apologize
- Blast at Ariana Grande concert in England kills 19 people VIEW
- What drivers can and cannot do under Washington state's new distracted-driving law
- Search suspended for Issaquah teen missing in Snoqualmie River
Pfizer’s surprise announcement Friday, in which it disclosed serious health risks in high doses of its arthritis drug Celebrex, roiled the pharmaceutical sector. Pfizer, a Dow stock, once again took losses, while other drug stocks remained mixed.
The proposed $12 billion deal between Illinois utility Exelon and New Jersey utility Public Service Enterprise Group gave investors reason to be confident, since continuing mergers and acquisitions bode well for the stock market. That led analysts to conclude that Wall Street’s year-end rally still had momentum.
“I think it’s a little bounce from the selling we saw on Friday,” said Chris Johnson, manager of quantitative analysis at Schaeffer’s Investment Research in Cincinnati. “Certainly Pfizer rattled some cages, and we had some of that knee-jerk selling across the board. Today they’re coming back.”
A drop in crude-oil futures, which retreated after last week’s large gains, also fed large-cap buying. A barrel of light crude settled at $45.64, down 64 cents, on the New York Mercantile Exchange.
Wall Street welcomed the latest reading from the Conference Board’s index of leading economic indicators. The index, a forward-looking view of the economy, rose 0.2 percent in November, better than the 0.1 percent rise expected on Wall Street. The index had fallen 0.3 percent in October.
Some investors were betting that the good economic news would combine with Wall Street’s traditional “Santa Claus” rally to produce gains through the next two weeks. Since 1972, the Dow has gained an average of 1.1 percent in the five days before Christmas and 0.99 percent in the five days afterward, according to Michael Sheldon, chief market strategist at Spencer Clarke.
“You have a couple of things pulling the market in different directions,” he said. “In general, the economy is doing pretty well, but the market is also somewhat overbought right now and ripe for profit taking. I would give the market the benefit of the doubt through the new year because of the way the markets rise around the holidays.”
On the Celebrex front, Pfizer said it will pull advertising for the drug until a determination of the seriousness of its health risks, which include an increased chance of heart problems. Celebrex and a related drug, Bextra, represent 10 percent of the Dow component’s total sales.
After dropping more than 11 percent Friday, Pfizer lost $1.46, or 5.67 percent, to $24.29, its lowest close since Dec. 26, 1997.
Mortgage giant Fannie Mae slid 89 cents to $69.42 after its board met Sunday to discuss a possible shake-up of its executive team in the wake of accounting discrepancies. No announcements were made after the meeting.