CORRECTED: Drug stocks' slide offsets banks
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Mon, 21 Jul 2008 18:47:03 GMT |
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(Corrects Bank of America share price in 8th paragraph)By Ellis MnyanduNEW YORK (Reuters) - Stocks were little changed on Monday as a slide in pharmaceutical shares offset gains by financial shares after Bank of America became the latest big U.S. bank to beat profit expectations.Shares of Bank of America, the No. 2 U.S. bank, jumped more than 10 percent, putting the stock among the Dow and the S&P 500's standouts.But Merck and Co and Schering-Plough fell after they delayed the release of their results so investors could first learn the outcome of a study of their Vytorin cholesterol fighter. Their financial results were delayed until after the close of trading."Merck delayed reporting its earnings, something that the market never likes. It doesn't like uncertainty," said Tim Smalls, head of U.S. stock trading at brokerage firm Execution LLC in Greenwich, Connecticut."On top of that, with financials turning around, money is going to come out from some place. There's a group rotation out of pharma into financials."The Dow Jones industrial average <.DJI> slipped 4.80 points, or 0.04 percent, to 11,491.77. The Standard & Poor's 500 Index <.SPX> climbed 1.09 points, or 0.09 percent, to 1,261.77. The Nasdaq Composite Index <.IXIC> edged up 1.40 points, or 0.06 percent, to 2,284.18.Financial shares were up for a fourth straight day.Bank of America shares rose to $29.25 on the New York Stock Exchange and followed other positive earnings surprises by banks last week, suggesting the financial sector may be stabilizing.Citigroup , Wells Fargo and JPMorgan Chase &Co also topped analysts' expectations when they reported earnings last week.The S&P financials sub-index <.GSPF> rose more than 2 percent, but the pharmaceutical index <.DRG> declined 0.2 percent.Shares of Merck slid more than 4 percent to $36.06.Shares of Schering-Plough fell more than 10 percent to $19.24 -- their biggest one-day slide in nearly 4 months.In other drug company news, Swiss pharmaceutical company Roche offered to buy all outstanding shares in U.S. partner Genentech Inc , the world's second-largest biotechnology company, for nearly $44 billion. Genentech shares jumped 12 percent to $91.95 on the NYSE.(Editing by Kenneth Barry)
(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
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