Schering Powers Drug Stock Rally

Major drug stocks rallied again on Wednesday, led by Schering-Plough after brokerage Morgan Stanley Dean Witter analyst raised its rating on the stock to “strong buy” from “neutral.”

Schering (ticker symbol: SGP) jumped $3 to $48.50 after Morgan Stanley said it had “increased confidence” in the company’s long-term outlook.

Other gainers Wednesday included Eli Lilly (LLY), up $2.06 to $82.81; Johnson & Johnson (JNJ), up $1.75 to $89.75; and Pharmacia (PHA), up $1.25 to $54.38.

Drug stocks have been on a roll since February, benefiting in part from many investors’ hunt for non-technology issues.

Also, the failure of some key states to advance drug price-control legislation has heartened drug-stock investors, analysts say.