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 Netflix Inc <NFLX.O> surged 7 percent to $372.90 a day after
reporting strong subscriber growth, a sign the trading favorite
still had room to grow despite recent valuation concerns. With the
day's gain, the stock moved to the plus side for the year after a 21
percent drop in March.
The S&P healthcare index <.SPXHC>, up 1 percent, was the best
performer of the 10 major S&P sectors. Allergan Inc <AGN.N> jumped
15.2 percent to $163.65 a day after activist investor William Ackman
teamed up with Canadian drugmaker Valeant Pharmaceuticals
International Inc <VRX.TO><VRX.N> to bid for the company.
U.S.-listed Valeant shares gained 7.5 percent to $135.41.
A deal between Novartis <NOVN.VX> and GlaxoSmithKline <GSK.L>, in
which the two traded over $20 billion worth of assets in an effort
to cope with healthcare spending cuts and generic competition, also
bolstered the healthcare sector. U.S.-listed shares of Novartis <NVS.N>
gained 1.3 percent to $86.56, while Glaxo <GSK.N> rose 4.1 percent
to $55.30.
Better-than-expected earnings have lifted stocks recently, though
companies have largely been exceeding reduced forecasts. Profits are
seen rising 1.1 percent this quarter, down from the 6.5 percent
growth rate estimated at the start of the year.
"What was baked into the market, in spite of a market near an
all-time high, was a sloppy earnings season," said Mike Serio,
regional chief investment officer of Wells Fargo Private Bank in
Denver.
"We've had some really good beats at this point, we've had a couple
of good announcements today, you throw on the M&A activity in the
drug sector, at least in the short term, everybody looks pretty
excited about this market."
Dow components Travelers Cos Inc <TRV.N> and United Technologies
Corp <UTX.N> both beat expectations, and United Tech raised the low
end of its full-year profit outlook. Shares of Travelers rose 0.6
percent to $86.89 while United Tech added 0.8 percent to end at
$119.19.
McDonald's Corp <MCD.N> reported earnings that fell alongside a drop
in U.S. same-store sales, and its stock slipped 0.4 percent to
$99.32.
With 20 percent of the S&P 500 having reported results through
Tuesday morning, 63 percent have topped earnings expectations,
according to Thomson Reuters data, matching the long-term average.
On the revenue side, 51 percent have exceeded forecasts, below the
61 percent long-term average.
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The Dow Jones industrial average <.DJI> rose 65.12 points or 0.40
percent, to end at 16,514.37. The S&P 500 <.SPX> gained 7.66 points
or 0.41 percent, to 1,879.55. The Nasdaq Composite <.IXIC> added
39.912 points or 0.97 percent, to 4,161.458.
After the close, Gilead Sciences Inc <GILD.O> advanced 1.1
percent to $73.65 after the drugmaker said its new $1,000 hepatitis
C pill generated quarterly sales of $2.27 billion, helping the
company's quarterly net profit nearly triple.
In another positive sign for equities, the Dow Jones Transportation
Average <.DJT>, up 0.6 percent, closed at its first record high
since April 2. The index got a boost from airlines such as United
Continental Holdings <UAL.N>, up 4.6 percent, and Alaska Air Group
Inc <ALK.N>, up 1.3 percent, which rose on a 2 percent drop in oil
prices.
Facebook Inc <FB.O> shares rose 2.9 percent to $63.03, helping to
lift the Nasdaq 100 <.NDX> and the S&P 500. Credit Suisse upgraded
the social networking company's stock to "outperform" on higher
expectations for its long-term average revenue per user.
Volume was light, with about 5.88 billion shares traded on U.S.
exchanges, below the 6.7 billion average so far this month,
according to data from BATS Global Markets.
Advancing stocks outnumbered declining ones on the NYSE by 2,227 to
811, while on the Nasdaq, advancers beat decliners 1,900 to 727.
(Reporting by Chuck Mikolajczak; editing by Nick Zieminski and Jan
Paschal)
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