While stocks have bounced back from yesterday's big losses as the markets approach earnings season again, one index is heading down again. As of 2:35 p.m. EDT, the Dow Jones Industrial Average (DJINDICES:^DJI) was just under breakeven, with blue-chip member stocks split evenly between risers and losers. Nike's (NYSE:NKE) making the most of the day today, leading the Dow with a strong showing. Outside of the Dow, big biotech's Gilead Sciences (NASDAQ:GILD) has struggled through a tough day. Let's catch up on what you need to know.
Nike looks to rebound off 2014's slow start
Nike's stock has fallen more than 9% year to date, but it received a 2.5% boost today after Stifel Nicolaus upgraded the athletic-apparel giant from hold to buy. The analyst said it sees Nike's earnings per share rising at a double-digit percentage rate in the near future behind stronger sales and improving margins, among other factors. Concern has mounted around Nike's international performance, particularly in China, where it has slumped as of late.
Nike did warn investors in March that currency issues could impact global sales in the near future. While the company did manage to kick Chinese sales higher by 7% in its latest earnings report, it needs to continue its push in emerging markets: Nike collects about 30% of total revenue from those markets, and any slump there likely will keep pressure on this stock in the near term. Still, in the long term, Nike has managed to hold its dominance in the athletics market despite fierce competition and rising rivals; if the company manages to continue its strong revenue growth, don't expect Nike to cede its reign atop this industry anytime soon.
Wal-Mart (NYSE:WMT) has gained 0.8% by midafternoon. The jump comes on the back of news that the big-box retailer is continuing its push into India, with a new objective of opening 50 new wholesale stores in the South Asian power over the next half-decade. It's an encouraging sign for investors given Wal-Mart's struggles in one of the most appealing emerging markets and the second most-populous country in the world, but it's no guarantee of success for the company. Wal-Mart planned to launch eight new wholesale stores in India last year and managed to open none, so caution is advised until the retailer can make more of a lasting dent in this market.
Finally, Gilead Sciences has taken a 3.4% pounding today as questions mount around the company's steep pricing of its breakthrough oral hepatitis C drug Sovaldi. Pharmacy benefits manager Express Scripts (NASDAQ:ESRX) has joined the chorus of calls to lower the drug's cost, hammering Gilead for the impact of the drug's price tag on consumer wallets. While this might not sound like much of a big deal at first -- after all, Sovaldi is the first such oral hep C drug to market in what could be a $20 billion industry, according to analysts -- it could be a tipping point for Gilead's lofty expectations of the drug. Sovaldi's peak sales estimates range around the $7 billion to $8 billion mark, making this an important foundation for Gilead's future and a huge drug launch. However, if rivals aiming for near-term approval of similar drugs can gain traction and outcompete Sovaldi on price, it's certainly possible that Gilead's drug could cede market share in the coming years as this market develops. Don't lose sleep over Gilead's stock just yet, but keep a close eye on how rivals are stepping up in the hep C race.
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Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Express Scripts, Gilead Sciences, and Nike. The Motley Fool owns shares of Express Scripts and Nike. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.