Stocks close higher on gains by tech, banking sectors even as drug makers struggle
U.S. stocks rose Monday despite drugmaker struggles, as a mix of smaller, U.S.-focused companies, technology firms and banks performed well.
Retailers and smaller companies rose for the third day in a row as their latest quarterly reports have investors feeling better about the U.S. economy and the shopping people are likely to do over the holidays. Technology companies rose after another deal between chip makers.
Trading was relatively light as the Thanksgiving holiday approaches and investors turn their attention to 2018. Jeff Kravetz, regional investment strategist for U.S. Bank Private Wealth Management, expects more gains for U.S. stocks but thinks indexes in other parts of the world will do better, as they’ve done this year.
“We’ve got developed markets working and we’ve got emerging markets working,” he said. “This is just a wonderful year for international markets after a bit of a drought.”
The Standard & Poor’s 500 index picked up 3.29 points, or 0.1%, to 2,582.14. The Dow Jones industrial average gained 72.09 points, or 0.3%, to 23,430.33. The Nasdaq composite advanced 7.92 points, or 0.1%, to 6,790.71. The Russell 2000 index of smaller-company stocks climbed 10.57 points, or 0.7%, to 1,503.40.
The big deal of the day was chip maker Marvell Technology Group’s announced acquisition of competitor Cavium for $6 billion. Cavium jumped $8.19, or 10.8%, to $84.02 and it’s up 22% over the last two weeks on reports of the expected bid. Marvell rose $1.30, or 6.4%, to $21.59.
Other technology companies also rose. IBM added $1.54, or 1%, to $150.51 and Cisco Systems gained 60 cents, or 1.7%, to $36.50.
A White House group said the opioid drug epidemic cost the U.S. $504 billion in 2016, far more than other recent estimates, and companies that make those pain medications traded sharply lower. The Council of Economic Advisers said that the new figure reflects the worsening crisis and that earlier figures didn’t calculate deaths or include the use of illegal drugs.
Allergan gave up $3.76, or 2.2%, to $171.12 and Teva Pharmaceutical Industries fell 76 cents, or 5.5%, to $13.08. Insys Therapeutics shed 17 cents, or 3.2%, to $5.20. Executives including Insys’ founder and its former CEO have been charged with offering kickbacks to doctors to get them to prescribe its fentanyl spray Subsys. Its stock traded above $40 in mid-2015.
Merck stumbled after Genentech, a unit of Swiss drugmaker Roche, reported positive results from a study of its drug Tecentriq as a primary treatment for lung cancer. Genentech said patients who were given the drug were less likely to die or see their cancer get worse.
The results could affect sales of Merck’s drug Keytruda and Bristol-Myers Squibb’s Opdivo. Merck fell $1.10, or 2%, to $54.10 and Bristol-Myers Squibb lost 52 cents to $60.80.
The Department of Justice plans to file a lawsuit to stop AT&T from buying Time Warner. Shares of Time Warner have stumbled over the last two weeks as investors anticipated that regulators might try to block the deal. The $85-billion deal would give AT&T the Warner Bros. movie studio and cable networks including HBO and CNN.
Time Warner lost $1.01, or 1.1%, to $87.71 and AT&T added 13 cents to $34.64.
Benchmark U.S. crude fell 46 cents to $56.09 a barrel in New York. Brent crude, which is used to price international oils, dropped 50 cents to $62.22 a barrel in London.
Wholesale gasoline remained at $1.74 a gallon. Heating oil lost 1 cent to $1.93 a gallon. Natural gas slipped 5 cents to $3.05 per 1,000 cubic feet.
The dollar rose to 112.67 yen from 112.13 yen late Friday. The euro slipped to $1.1732 from $1.1796 after a group of German political parties couldn’t agree to form a government, which might mean new elections are on the way.
A weaker euro is good for companies that export a lot of products, and the German DAX was up 0.7% while France’s CAC 40 rose 0.5%. The FTSE 100 in Britain added 0.2%. In Japan, the Nikkei 225 index lost 0.6% and South Korea’s Kospi shed 0.3%. Hong Kong’s Hang Seng index added 0.2%.
Gold slumped $21.20, or 1.6%, to $1,275.30 an ounce. Silver sank 53 cents, or 3.1%, to $16.84 an ounce. Copper gained 3 cents to $3.09 a pound.
Bond prices edged lower. The yield on the 10-year Treasury note rose to 2.36% from 2.35%.
1:45 p.m.: This article was updated throughout with closing stock prices.
9:50 a.m.: This article was updated throughout with more details on morning trading.
This article was originally published at 7:45 a.m.
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