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Mixed action with spots of strength

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After a lower open, the major indexes have been jumping back and forth the unchanged levels as healthcare-related sectors flex some muscle with Biotech (BTK.X) 337 +3.75%, Pharmaceutical (DRG.X) 298 +2.49% and HMO's (HMO.X) 579 +2.36% leading sector gains.

HMO stocks are finding buyers on what many speculate as Republicans showing strongholds in the mid-term election, which would tend to bode better than Democrats winning seats.

Dow component Merck (NYSE:MRK) 49.77 +5.20% leads the Pharmaceutical Index (DRG.X) gainers list after the drug maker received a portion of U.S. sales of Prilosec, AstraZenica's (NYSE:AZN) $36.31 +11.58% blockbuster anti-heartburn drug, through a longstanding agreement. A federal court judge ruled late Friday that generic versions of Prilosec being developed by Andrx (NASDAQ:ADRX) $11.97 -40% and two other drug makers, Dr. Reddy's (NYSE:RDY) $15.55 -11.04% and Genpharm, would infringe on AstraZeneca patents.

Shares of IBM (NYSE:IBM) $62.80 -1.81% attempt to recover from their lows of the session ($61.54) after Morgan Stanley cut its fourth-quarter and 2003 earnings and revenue estimates to reflect the drop in return on pension assets. Morgan Stanley said that the company did not experience "the normal pickup" in hardware orders over the last few weeks, it had been expecting.

The Utility Index (UTY.X) 219 -2.64% leads this morning's sector weakness as shares of recently battered TXU Corporation (NYSE:TXY) $11.65 -37.8% break to another 52-week low after the company said late Friday that it would draw down it bank facilities next week to boost available cash by $2.6 billion. This morning, the company announced an 80% reduction in its quarterly dividend, to 12.5 cents a share from 60 cents a share, as it moves to ensure its credit rating and liquidity position. The electric and natural gas company also negotiated terms of an additional credit facility of up to $1 billion at its Oncor unit, negotiating an amendment to a $500 million bank facility that eliminated foreign subsidiaries from its cross fault provision, saying it would "significantly" reduce developmental capital expenditures and limit equity contributions to it European operations.

After weakness in its shares over the past week on "power plant concerns," Raytheon (NYSE:RTN) $29.14 +1.8% rose to a session high of $30.14 after it said it will meet third-quarter expectations despite hiccups at two Massachusetts power plants relating to turbine problems. For the quarter, Raytheon said it would meet its previous forecast profit estimates of 56 cents a share.

Jeff Bailey

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