After a week of disappointment, the stock market finally decided to see the glass as half full today. With confirmation of a big deal in the telecom industry as well as decent earnings results and some encouraging news on the retail sales front, investors were able to overcome a slow start to put in a good gain on the day. By the close, the Dow Jones Industrials (^DJI 0.10%) finished up 95 points.
Looking at individual Dow components, you could find pockets of strength in several places. Financials clearly had a good day after Citigroup announced reasonably good earnings results. But pharmaceutical stocks also performed well, with both Merck (MRK 4.14%) and Pfizer (PFE 0.56%) up in the neighborhood of 2%. Merck announced results from a phase 2 clinical trial of its osteoporosis drug odanacatib that showed statistically significant improvement in bone density, raising the prospects of a potential blockbuster should the drug continue to produce favorable results. More broadly, though, investors seem finally to see a light at the end of the patent-cliff tunnel, as investors in both stocks have sent share prices to 52-week highs.
Retail stocks also did well in light of the positive news on retail sales, with both Wal-Mart (WMT +0.64%) and Home Depot (HD 0.88%) posting nearly 2% gains. Sales gains came from several different major categories, with electronics seeing a particularly strong showing due to the release of the iPhone 5, which Wal-Mart carried in its stores. Home Depot, on the other hand, continues to benefit whenever positive economic news comes out, as the housing sector arguably has the furthest to run higher and could help its business for years to come.
