By Leslie Wines, MarketWatch
Dec 19, 2005
U.S. stocks were mixed in morning trade Monday, with the pharmaceutical
sector outperforming many other groups after Pfizer Inc. won a legal
victory, as investors wondered about the state of the end-of-the-year
rally.
The Dow Jones Industrial Average was up 29.84 points at 10,905.43.
The S&P 500 rose 2.11 points to 1,269.43 as the Nasdaq Composite fell 3.90
points to 2,248.58.
Stocks opened higher Monday, on the back of the Pfizer patent victory and
an $11 billion merger of FPL Group and Constellation Energy, but the
Nasdaq Composite quickly gave up its gains.
Analysts have expressed disappointment that the gains seen so far in
December have not been as vigorous as those seen during November, calling
into question the state of the late-year rally.
Jay Suskind, director of trading at Ryan, Beck & Co., said, "There are
greater odds the market will rally, rather than fall, because there is a
sense that the Federal Reserve will halt the rate hikes and the economy
will remain strong in 2006."
However, much late-year tax-related selling now is out of the way and
volume is likely to be light ahead of the New Year, Suskind said.
There are no economic reports to lend direction to trade Monday, but
investors will view the November producer price report on Tuesday and
gross domestic product data on Wednesday.
Peter Cardillo, chief market analyst at S.W. Bach, said he expects the
economic reports this week to be strong and spur gains.
Energy prices, which remain closely monitored, gave up their opening gains
to trade lower. The front-month crude contract last was 6 cents lower at
$58.
Gold was higher, with the futures contract up $4.10 at $510 an ounce.
The Treasury market was trending lower, sending yields higher, ahead of an
afternoon auction of new three- and six-month notes. The benchmark 10-year
note last was down 2/32 at 100-13/32 with a yield of 4.450%.
The dollar regained some of the strength it lost last week, after Federal
Reserve officials signaled that an end to U.S. rate increases may be in
sight. The dollar rose 0.4% to 116.05 yen as the euro fell 0.2% to
$1.1992.
Stocks of note
Pfizer zoomed more than 9% to $24.72 a share.
Late Friday a U.S. judge ruled for Pfizer in its patent dispute with
Ranbaxy Laboratories Ltd. over Lipitor, the world's top-selling
prescription medication.
Other pharmaceutical stocks were swept higher, too, including Merck & Co.,
which rose 5.6% to $31.68, and Bristol-Myers Squibb Co., up 2.9% at
$22.65.
FPL Group and Constellation announced a merger that will create a company
with a market capitalization of about $28 billion, annual revenue of $27
billion and $57 billion of assets.
FPL shares were 35 cents higher at $43.30 as Constellation Energy dropped
3.1% to $59.66.
Cablevision Systems were off 4.3% at $22.96 after the company said it
would not proceed with a proposed $3 billion special dividend.
The Internet sector was in focus. Google Inc. reportedly plans to buy a 5%
stake in the AOL division of Time Warner, a move that would edge out
Microsoft.
Time Warner Inc. shares were up 14 cents at $18.14.
This MarketWatch news update is provided to you courtesy of Thomson
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SOURCE Thomson Financial Corporate Group
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