- The Washington Times - Monday, December 20, 2004

NEW YORK (AP) — Wall Street’s holiday rally stumbled yesterday, with stocks finishing mixed as investors worried over the strength of the pharmaceutical sector. Another merger, between a pair of regional utilities, buoyed confidence in the overall economy and pushed blue chips higher.

Pfizer Inc.’s surprise announcement Friday, in which it disclosed serious health risks in high doses of its arthritis drug Celebrex, roiled the pharmaceutical sector. Pfizer, a Dow Jones industrial, once again took losses, while other drug stocks remained mixed.

The proposed $12 billion deal between Illinois utility Exelon Corp. and New Jersey utility Public Service Enterprise Group Inc. gave investors reason to be confident, since continuing merger and acquisition activity bodes well for the stock market. That led analysts to conclude that Wall Street’s year-end rally still had momentum.

“I think it’s a little bounce from the selling we saw on Friday,” said Chris Johnson, manager of quantitative analysis at Schaeffer’s Investment Research in Cincinnati. “Certainly Pfizer rattled some cages, and we had some of that knee-jerk selling across the board. Today they’re coming back.”

The Dow rose 11.68, or 0.11 percent, to 10,661.60. The blue chips were up more than 70 points in morning trading.

Broader stock indicators were narrowly mixed. The Standard & Poor’s 500 index was up 0.45, or 0.04 percent, at 1,194.65, and the Nasdaq Composite Index fell 7.35, or 0.34 percent, to 2,127.85.

A drop in crude oil futures, which retreated after last week’s large gains, also fed large-cap buying. A barrel of light crude settled at $45.64, down 64 cents, on the New York Mercantile Exchange.

Wall Street welcomed the latest reading from the Conference Board’s index of leading economic indicators. The index, a forward-looking view of the economy, rose 0.2 percent in November, better than the 0.1 percent rise expected on Wall Street. The index had fallen 0.3 percent in October.

Some investors were betting that the good economic news would combine with Wall Street’s traditional “Santa Claus” rally to produce gains through the next two weeks. Since 1972, the Dow has gained an average of 1.1 percent in the five days before Christmas and 0.99 percent in the five days afterward, according to Michael Sheldon, chief market strategist at Spencer Clarke LLC.

“You have a couple of things pulling the market in different directions,” Mr. Sheldon said. “In general, the economy is doing pretty well, but the market is also somewhat overbought right now and ripe for profit taking. I would give the market the benefit of the doubt through the new year because of the way the markets rise around the holidays.”

Pfizer said it will pull advertising for Celebrex until the seriousness of the drug’s health risks, which include an increased chance of heart problems, can be determined.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide