Please ensure Javascript is enabled for purposes of website accessibility

Big Pharma Led the Dow to New Highs Today

By Dan Caplinger - Apr 10, 2013 at 8:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

With an emphasis on dividends and value, investors sent the drug giants to healthy gains.

Investors have been as clear as they can be about what they see as their ideal situation. In the simplest terms, they want the support that the Federal Reserve has provided to the markets without any suggestion that they desperately need that support. That's been a fine line for the Fed to walk, but the early announcement of the Federal Open Market Committee's latest minutes suggests that the central bank has managed to keep its balancing act going. Investors applauded the measured approach that the Fed is apparently taking, sending the Dow Jones Industrials (^DJI 0.03%) up 129 points to another record high, while the S&P 500 hit levels it had never seen before, even on an intraday basis.

In writing about the Dow's pharmaceutical components this morning, I had no idea they would eventually prove to be the stars of today's session. But Merck (MRK 1.58%) and Pfizer (PFE 3.59%) both rose almost 3% today, because of a combination of company-specific news and general bullishness on the two dividend giants. Pfizer announced that its palbociclib experimental treatment for advanced breast cancer received FDA designation as a breakthrough drug, which should help it earn an expedited development and review schedule as Pfizer plans appropriate research for the drug.

For Merck, the positive news came from the FDA's review of the company's application to create a pill form of its Noxafil drug to treat fungal infections. The treatment is already available in liquid form, but Merck believes that a pill version presents a valuable additional therapy option, especially for those with compromised immune systems.

Finally, MannKind (MNKD 4.84%) jumped about 8%. The company is expecting to finish clinical studies in the next couple of months that could help determine the fate of its Afrezza inhalable insulin product, which MannKind wants to submit for FDA approval by the fourth quarter of 2013. Speculation about MannKind's future has driven the stock to levels it hasn't seen since early 2011, but the stock remains well off much higher levels from 2009 and 2010, as well as before the financial crisis struck.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$31,261.90 (0.03%) $8.77
Merck & Co., Inc. Stock Quote
Merck & Co., Inc.
MRK
$93.55 (1.58%) $1.46
Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$52.47 (3.59%) $1.82
MannKind Corporation Stock Quote
MannKind Corporation
MNKD
$3.68 (4.84%) $0.17

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
331%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/21/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.