Pfizer Falls, but the Dow's Record Run Continues

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.

Source: Wikimedia Commons.

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.

Will this stock be your next multi-bagger?
Give us five minutes and we'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2985691, ~/Articles/ArticleHandler.aspx, 8/23/2014 2:41:06 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement