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US stocks sag; Teva bid for Mylan boosts pharma shares
[NEW YORK] US stocks mostly fell Tuesday, but the Nasdaq stayed in positive territory as Israel's Teva announced a US$40.1 billion cash-and-stock bid for generic drug maker Mylan.
The Dow Jones Industrial Average closed down 85.34 points (0.47 per cent) at 17,949.59.
The broad-based S&P 500 slipped 3.11 points (0.15 per cent) to 2,097.29.
But helped by Mylan's 8.9 per cent surge, the tech-rich Nasdaq Composite added 19.50 (0.39 per cent) at 5,014.10.
Teva's cash-and-stock bid for Mylan would quash Mylan's own offer earlier this month to acquire Perrigo for $28.9 billion.
Mylan shares surged 8.6 per cent and Teva gained 2.7 per cent, while Perrigo slipped 2.0 per cent.
Further spicing up the pharma deals pot, after the markets closed Tuesday Perrigo's board rejected Mylan's bid as too low.
The Teva move sparked gains in other large pharma stocks: Merck added 0.4 per cent, Novartis ADRs 1.8 per cent, Amgen 1.5 per cent, Bristol-Meyers Squibb 1.4 per cent, Abbott Labs 1.1 per cent, and AstraZeneca 1.6 per cent.
Biotech giant Gilead soared 4.5 per cent.
On the other hand, the strong dollar dealt a blow to fresh first-quarter results and appeared to impact a broader base of global firms.
Dow member DuPont shares lost 3.0 per cent after it cut its full-year outlook as it raised the expected hit to earnings from currency shifts. The stronger dollar took 25 cents off first-quarter earnings per share, which came in at $1.34, close to expectations.
Iconic motorcycle maker Harley-Davidson cut its prediction for shipments this year, in part due to currency shifts, sending its shares down 9.8 per cent.
Following suit on the blue-chip Dow, GE dropped 1.5 per cent, McDonald's - which reports on Wednesday - fell 1.4 per cent, and IBM lost 1.1 per cent.
Bond prices fell. The yield on the 10-year US Treasury rose to 1.92 per cent from 1.88 per cent Monday, while the 30-year advanced to 2.59 per cent from 2.55 per cent. Bond prices and yields move inversely.