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 Merck & Co <MRK.N>'s shares climbed 3.6 percent to $58.72, giving
the S&P 500 its biggest lift, after it reported
stronger-than-expected earnings.
Further deal activity on the healthcare front also lifted the
market. Britain's Reckitt Benckiser Group Plc <RB.L> confirmed talks
to buy Merck's consumer health business, the latest asset up for
grabs in a wave of recent pharmaceutical deals.
"Investors are viewing (that activity) as a signal for positive
conditions in which businesses are willing and able to offer
substantial sums of cash and/or stocks," said Mark Luschini, chief
investment strategist at Janney Montgomery Scott in Philadelphia.
Also supportive: most S&P 500 companies are beating earnings
forecasts, albeit on lowered expectations, he said.
Earnings estimates have rebounded, however, as more companies have
reported results. First-quarter profit growth for S&P 500 companies
is seen at 3.7 percent, based on actual results and estimates for
companies yet to report, compared with a forecast for 2.1 percent
growth at the beginning of the month, Thomson Reuters data showed.
The Dow Jones industrial average <.DJI> rose 86.63 points or 0.53
percent, to 16,535.37, the S&P 500 <.SPX> gained 8.9 points or 0.48
percent, to 1,878.33 and the Nasdaq Composite <.IXIC> added 29.142
points or 0.72 percent, to 4,103.543.
Shares of Facebook <FB.O>, up 3.6 percent at $58.15, led the way
higher on the Nasdaq, a day after selling off along with a host of
other momentum names.
Shares of Twitter <TWTR.N> jumped 4.6 percent to $42.62 ahead of its
results after the bell, when it reported 255 million monthly active
users, up from the previous quarter but not enough to satisfy
investors. The stock was down 10.2 percent in after-hours trading.
Also after the bell, shares of eBay <EBAY.O> fell 3.8 percent to
$52.45 as its second-quarter forecast fell short of estimates.
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During the regular session, Sprint Corp <S.N> shares jumped 11.3
percent to $8.27. The No. 3 U.S. mobile provider reported an
increase in quarterly revenue, as expected, due to a new billing
plan that lowered wireless expenses.
On the down side, Coach Inc <COH.N> reported a sharp drop in North
American sales and the stock slumped 9.3 percent to $45.71.
Archer Daniels Midland Co <ADM.N> finished down 2.6 percent at
$43.23 after its first-quarter profit and sales missed Wall Street
estimates.
About 6.3 billion shares changed hands on U.S. exchanges, below the
6.6 billion average this month, according to data from BATS Global
Markets.
The Fed's two-day policy meeting began on Tuesday, with the central
bank expected to again scale back its monthly bond purchase program.
Investors will also be eager to get any guidance on when it might
raise interest rates.
Data suggested the economy continued to gain momentum after the
winter lull. U.S. consumer confidence dipped in April but remained
near a six-year high, while home prices rose in February.
(Editing by Bernadette Baum and Nick Zieminski)
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