The Dow also managed to end the session with a modest gain, while
the Nasdaq closed slightly lower after rebounding from a fall of
over 1 percent. Leading the Nasdaq down was Amazon.com <AMZN.O>,
which extended Friday's sharp drop a day after its earnings report.
A flurry of merger and acquisition activity in the pharmaceutical
sector increased speculation of further deal-making. Shares of
Pfizer gained 4.2 percent to $32.04 after the U.S. drugmaker was
said to be working on its next move in a potential bid to take over
Britain's AstraZeneca Plc <AZN.L>.
"What we saw earlier was you had more rotation out of the high-beta
momentum names, and a lot of those tech players rotated into Apple,
which just had positive earnings," said Michael O'Rourke, chief
market strategist at JonesTrading in Greenwich, Connecticut.
"This whole M&A aspect of the pharmaceutical healthcare industry has
people positively biased for the time being," he said, and "people
who had to sell the momentum names are at least finished for the
The Dow Jones industrial average <.DJI> rose 87.28 points or 0.53
percent, to end at 16,448.74. The S&P 500 <.SPX> gained 6.03 points
or 0.32 percent, to 1,869.43. The Nasdaq Composite <.IXIC> dropped
1.161 points or 0.03 percent, to 4,074.401.
Apple's stock jumped 3.9 percent to $594.09. The stock has gained
13.2 percent since the close on Wednesday, when Apple reported
results after the bell.
Amazon.com ended down 2.4 percent at $296.58. High-growth stocks
have been battered in recent weeks as investors have pulled out of
the tech and biotech space.
Bank of America shares tumbled 6.3 percent to $14.95 after the
company said it will suspend a planned increase in its quarterly
dividend as well as its latest stock-buyback program because it
miscalculated a measure of the capital on its books.
[to top of second column]
Chinese Internet stocks also fell after China's government ordered
the removal of four U.S. television shows from video websites. The
U.S.-listed shares of Baidu <BIDU.O> slid 7.4 percent to $150.93.
In other M&A activity, Forest Laboratories Inc <FRX.N> said it would
buy Furiex Pharmaceuticals Inc <FURX.O> for up to $1.46 billion.
Furiex Pharmaceuticals shares surged 28.6 percent to $103.05 while
Forest Laboratories shares shed 0.4 percent to $89.50.
Agenus <AGEN.O> shares jumped 19.5 percent to $3.06 after the
biotechnology company said it signed a deal with Merck & Co Inc <MRK.N>
to discover and develop antibody-based treatments against cancer.
After the bell, shares of in-flight wireless Internet services
provider Gogo <GOGO.O> dropped 19.2 percent to $14.85 after AT&T <T.N>
said it plans to launch an in-flight connectivity service.
During the session, about 7.4 billion shares changed hands on U.S.
exchanges, above the 6.5 billion average so far this month,
according to data from BATS Global Markets.
(Editing by Bernadette Baum and Jan Paschal)
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