While you were sleeping: Forest Lab deal lifts
Feb 19 (BusinessDesk) – Wall Street moved higher, supported by a US$25 billion takeover of Forest Laboratories by
Dublin-based Actavis which reminded investors that there is still value to be found in equities.
"Just the fact that acquisitions are being made shows that prices aren't completely out of whack," Rick Meckler,
president of investment firm LibertyView Capital Management in Jersey City, New Jersey, told Reuters. “That's supportive
to the market and it certainly shifts investors' focus from profit taking.”
Shares of Forest soared, last up 29.4 percent.
"Bolstered by one of the deepest and most diversified product portfolios in the industry with an exceptionally strong
pipeline, this transaction creates a powerful engine for generating long-term, double-digit revenue and earnings
growth,” Paul Bisaro, chairman and CEO of Actavis, said in a statement.
In afternoon trading in New York, the Standard & Poor’s 500 Index rose 0.17 percent, while the Nasdaq Composite Index added 0.69 percent.
The Dow Jones Industrial Average was unchanged at 16,154.35, as gains in shares of Goldman Sachs, last up 1 percent, and
those of Walt Disney, last up 0.9 percent, offset slides in shares of Verizon Communications, last down 1.2 percent, and
those of AT, last down 1 percent.
US markets were closed on Monday for the Presidents’ Day holiday.
Shares of Coca-Cola slid, last down 4.1 percent, after the company reported a drop in fourth-quarter profit. Investors
are not optimistic about the outlook.
“The changes that the company is making just aren’t enough,” Ali Dibadj, an analyst at Sanford C Bernstein & Co, told Bloomberg News. “Many investors aren’t sharing the confidence that management does of the company’s future.”
Meanwhile, the latest US economic data were yet again plagued by the severe winter. The National Association of Home
Builders’ housing market index dropped by 10 points to 46 in February.
“Significant weather conditions across most of the country led to a decline in buyer traffic last month,” NAHB Chairman
Kevin Kelly said in a statement. “Builders also have additional concerns about meeting ongoing and future demand due to
a shortage of lots and labour.”
The Fed Bank of New York’s general economic index dropped more than expected, declining to 4.48 in February from 12.5 in
January.
In Europe, the Stoxx 600 Index ended the day with a small gain from the previous close at 334.6. Germany’s DAX also
edged higher, closing with a gain of 0.03 percent. The UK’s FTSE 100 climbed 0.9 percent. France’s CAC 40 fell 0.1
percent.
Here, German investor confidence took a larger-than-expected beating this month. The ZEW Center for European Economic
Research’s index of investor and analyst expectations dropped more than expected in February, sliding to 55.7 from 61.7
in January.
(BusinessDesk)