Wall Street to Watch Drug Makers’ Stocks
U.S. stocks should hold firm this week with little economic data or corporate news on tap to move the market going into the Christmas holiday.
But nervousness will persist around drug makers’ shares after the hit they took Friday on a barrage of sour product news from sector heavyweights such as Dow component Pfizer Inc., and smaller rivals AstraZeneca and Eli Lilly & Co.
Pfizer’s stock initially fell as much as 19%, before retracing close to half that loss by the end of trading, after it said a study of its popular Celebrex arthritis drug found evidence of increased cardiovascular risk.
On what seemed like a Black Friday for drug makers, Pfizer’s warning coincided with news that Lilly would slap a warning label on Strattera, its medicine for attention deficit disorder, for some patients who should not take this drug.
Those setbacks were preceded by Anglo-Swedish group AstraZeneca’s statement that its lung cancer drug Iressa, already launched in the U.S. and Japan, had failed to help patients live longer in a major clinical study.
For the week, the Dow Jones industrial average rose 1%. The Standard & Poor’s 500 index gained 0.5% and the Nasdaq composite index finished the week up 0.3%.
With just two weeks left before closing the books on 2004, the three major indexes are all in the black for the year. The Dow is up 1.9%, the S&P; 500 is up 7.4% and Nasdaq is up about 7%.
Pharmaceutical stocks aside, equity strategists said the general tone of the market this week would otherwise be stable in the absence of any notable market-moving economic data.
“There is confidence that the economy is on a self-sustaining expansion course and I don’t think anything is going to happen to upset that expectation. The problem now is only stock-specific,” said Michael Metz, chief investment strategist at Oppenheimer & Co.
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This Week’s Datebook
Today
* Conference Board reports its monthly leading economic indicators index.
Tuesday
* Bear Stearns & Co., General Mills Inc. and Morgan Stanley issue quarterly reports.
Wednesday
* Commerce Department reports on third-quarter gross domestic product.
* Robert Mondavi Corp. shareholders vote on whether to approve a proposed takeover by beverage giant Constellation Brands Inc.
Thursday
* Labor Department reports on weekly jobless claims.
* Commerce Department reports on durable goods orders and on personal income and spending for November.
* Freddie Mac reports on mortgage rates.
Friday
* Financial markets, government offices and most nonretail businesses are closed for Christmas Eve.
