Today was a bit of a head-scratcher, given that much of the economic data that dominated the scene wasn't particularly encouraging.
Domestically, the U.S. Labor Department said the Producer Price Index, or PPI, delivered a 0.7% contraction last month -- the largest reduction in more than three years -- with food and gasoline costs leading a big portion of that drop. While lower prices might appear like a good thing for consumers, deflation is a scary concept for businesses. It also didn't help that industrial production dipped by 0.5% last month, either.
Looking overseas, eurozone GDP came in at minus 0.2%, 0.1% worse than economists had been forecasting. Furthermore, France dipped back into recession for the third time in four years while European stronghold Germany posted much weaker GDP growth of just 0.1%, when 0.3% was expected. This signals to the world that Europe's problems are likely to persist for years to come.
Somehow, the broad-based S&P 500 (SNPINDEX:^GSPC) was able to shake off this disparaging news and head higher by 8.44 points (0.51%) to close at 1,658.78 -- another all-time high.
Leading the index higher was big pharmaceutical Bristol-Myers Squibb (NYSE:BMY), which rallied 5.1% ahead of the release of abstract data on its early-stage melanoma treatment. The treatment combines its already FDA-approved Yervoy with an experimental compound known as Nivolumab, which is a PD-1 inhibitor that can cause death in cancer cells. With the company expected to present at the American Society of Clinical Oncology meeting at the end of the month, shareholders appear to be betting big that the results will be encouraging.
Specialty chemicals maker Eastman Chemical (NYSE:EMN) jumped 5% after announcing the appointment of Mark Costa to the position of CEO when current CEO James Rogers retires at the end of the year. Shareholders appear thrilled that Eastman's new leader will be coming from within the company, and it also ends a lot of the uncertainty that can usually hang over a company in search of a replacement CEO. At just 10 times forward earnings, Eastman could be a real bargain if the U.S. economy even picks up slightly.
Finally, medical-device maker Boston Scientific (NYSE:BSX) advanced 4.6% following an announcement that the first patient had been enrolled in its clinical study examining the effects of its self-expanding metal stent, WallFlex Biliary RX Stent, as a bridge to surgery. Boston Scientific has had a great year so far, but it still isn't out of the woods. The medical-device excise tax is certain to take a bite out of its profit potential, and safety concerns persist throughout the stent sector even though an independent committee proved St. Jude Medical's (NYSE:STJ) Durata defibrillator lead to be safe. A little bit of time and good results from this clinical study could give Boston Scientific the momentum it needs to head even higher.