M&A News, Slew Of Strong Data And Corporate Earnings Push Markets Higher

U.S. stock markets jumped higher on Tuesday following a major piece of M&A news in the pharmaceutical sector, strong data and corporate earnings.

As of 3:38 p.m. ET, the Dow Jones Industrial Average jumped 87.4 points, or 0.60 percent to 16553, the S&P 500 gained 10.9 points, or 0.60 percent to 1882, while the Nasdaq Composite increased 41.5 points, or 1 percent to 4163.

It was all about the biotech sector on Wall Street Tuesday, with as leading companies announcing merger deals.

Novartis announced a Tuesday it would buy the oncology products unit at GlaxoSmithKline  in a deal for $14.5 billion, while selling GSK its vaccines units — except for flu vaccines — for $7.1 billion. They will also be starting up a joint venture in consumer health space. The new venture will be managed and run by GlaxoSmithKline, which will own a 63.5 percent stake.

Novartis had a big Tuesday revamping its portfolio, also announcing it will be selling off its animal health division to Eli Lilly to the tune of roughly $5.4 billion. The move will allow Novartis to refocus on drugs and eye-care products, while keeping revenue roughly at current levels.

“The transactions mark a transformational moment for Novartis,” Novartis CEO Joseph Jimenez said in a statement. “Looking ahead, this positions Novartis well for future healthcare industry dynamics.”

Meanwhile, in corporate news, blue-chip giant United Technologies reported stronger-than-expected quarterly results, while Travelers, the insurance giant, also reported profits that beat Wall Street’s expectations. Netflix also posted better-than-expected results, following the announcement it will increase subscription costs to combat the perception it is overvalued. Netflix shares climbed higher in late-day trading. Earnings from McDonald’s, who has been plagued with union agitation, however, missed Wall Street’s expectations.

Also, the National Association of Realtors reported Tuesday that sales of existing single-family homes fell 0.2 percent in March from the month prior, now down to an annualized rate of 4.59 million units, which is the lowest level in more than 1-1/2 years. However, resales still beat Wall Street expectations for 4.55 million units.

“We expect that rising demand and limited inventory will continue to boost start and sale activity, as well as home prices, in 2014,” Cooper Howes, an economist at Barclays, wrote in an email to clients.

In commodities, U.S. crude oil futures fell 38 cents, or 0.36 percent to $103.99 a barrel, while Wholesale New York Harbor gasoline fell 0.46 percent to $3.073 a gallon. Gold, today, rose $3.40, or 0.25 percent to $1,292 a troy ounce.