Stocks this afternoon as continuing the record run that has the Dow Jones Industrial Average (DJINDICES: ^DJI ) touching a series of new highs. As of 2:30 p.m. EDT, the Dow had gained more than 78 points and sat just 85 points shy of the 17,000 mark. Most stocks on the blue-chip index are in the green, yet Dow laggard Pfizer (NYSE: PFE ) hasn't managed to get anything going today. Meanwhile, Hertz (NYSE: HTZ ) has fallen 8.9% to close out the week. Let's catch up on what you need to know.
Jobs report hits the mark
The U.S. Department of Labor said the economy gained 217,000 jobs last month, topping economists' average projection of 210,000 new jobs. The unemployment rate of 6.3% didn't change, though that came about due to more Americans seeking work in May. Economists largely believe the U.S. economy can bounce back from a colder than average winter in the next few months, a trend that could keep four consecutive monthly job gains of 200,000 or more positions steady into the summer. It's hoped that such job growth can provide a jump-start for wages, which have stagnated and grew just 0.2% in May.
The market has thrived behind the jobs report's strength today, but don't tell that to investors in Big Pharma's Pfizer. The drugmaker's shares fallen more than 1% to the bottom of the Dow, continuing Pfizer's 5.5% drop over the past six months. Investors and analysts have fretted over Pfizer's whiffed attempt to purchase rival drugmaker AstraZeneca, particularly given the relative lack of superstars in Pfizer's pipeline, with the exception of ballyhooed breast cancer drug palbociclib.
Pfizer has made the most of palbociclib, and last month filed for FDA approval of the drug based on promising phase 2 trial results alone, thereby skipping out on costly -- and more concerning, lengthy -- late-stage trials for the drug. Analysts estimate palbociclib can hit peak annual sales north of $2 billion, and Pfizer will need all it can get if the drug clears regulators. Investors haven't been pleased with the company's declining sales, particularly as Pfizer's total biopharmaceutical revenue plunged by more than 9% year over year in its most recent quarter. While palbociclib boasts a high ceiling, investors will expect more out of Pfizer's top drug franchises, such as the Prevnar series of vaccines and rheumatoid arthritis drug Xeljanz, the latter of which boasts peak sales estimates north of $1 billion but so far has been unable to draw strong sales.
Meanwhile, Hertz revealed that it will need to correct financial statements due to possible accounting errors in 2011's results, which could impact the 2012 and 2013 statements. The accounting uncertainty has sent jitters through Wall Street today over the stock, which had jumped by more than 7.5% over the past month. Hertz also warned that costs from the review could add up to the quarter that ended in March and cautioned that it expects to miss estimates. While Hertz pledged to make changes to improve its accounting department, this is still a nasty blow for investors who have celebrated the recent run-up of this stock. While it's best not to pull the trigger on a hasty sell because of the error, investors should keep a close eye on how Hertz's review pans out to judge the direction of this company.
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