November 22, 2014
Wall Street closes higher on Citi earnings, healthcare M&A
US stocks ended higher today, with the Dow Jones industrial average hitting an intraday record, lifted by Citigroup's better-than-expected earnings and more deals in the healthcare space.
A flurry of mergers and acquisitions activity in the healthcare sector gave investors some confirmation that the US stock market is still attractive. Shire Plc, which develops and sells drugs to treat rare diseases, succumbed to an increased takeover offer of 31 billion pounds($53 billion) from AbbVie Inc on Monday.
U.S.-listed shares of Shire rose 2.1 percent to $254.27 while AbbVie shares slipped 0.2 percent to $54.85.
Generic drugmaker Mylan Inc said it would buy Abbott Laboratories' specialty and branded generics business outside the United States in an all-stock transaction valued at about $5.3 billion. Mylan shares advanced 2.1 percent to $51.24 while Abbott shares rose 1.3 percent to $41.82.
Citigroup Inc shares jumped 3 percent to $48.42 and gave the S&P 500 one of its biggest boosts. The stock rallied after Citigroup reported second-quarter adjusted earnings per share that exceeded the average analyst estimate and agreed to pay $7 billion to settle a US government investigation into mortgage-backed securities. The S&P financial index gained 0.6 percent.
The Dow Jones industrial average rose 111.61 points or 0.66 percent, to end at 17,055.42. The S&P 500 gained 9.53 points or 0.48 percent, to 1,977.10. The Nasdaq Composite added 24.93 points or 0.56 percent, to 4,440.42.
The Dow hit a record intraday high of 17,088.43.
European equities also rose, rebounding from near two-month lows after their biggest weekly loss in four months, with banks leading the rally following strong earnings from Citigroup.
The FTSEurofirst 300 index of top European shares ended 0.8 percent firmer at 1,363.49 points, having fallen 3 percent last week - its biggest drop since March.
The STOXX Europe 600 Banking index gained 1.1 percent to become the top sectoral gainer in Europe after results from U.S. bank Citigroup, which are keenly watched by markets across the world, showed a stronger-than expected adjusted quarterly profit and raised hopes for its peers.
Meanwhile, Japan's Nikkei average gained ground, ending its longest losing streak since the "Abenomics" rally started in November 2012, led by retail buying of small- and medium-cap stocks and speculative buying of index futures.
The benchmark Nikkei rose 0.9 percent to 15,296.82, surfacing above its 25-day moving average of 15,224.18, to end a five-day slide after euro zone banking jitters faded and lifted Wall Street shares on Friday.
But many institutional investors stayed on the sidelines ahead of a barrage of events this week, including the Bank of Japan's policy meeting.
The broader Topix advanced 0.8 percent to 1,265.46 in light trade, while the JPX-Nikkei Index 400 added 0.8 percent to 11,509.01.