Stocks have suffered a terrible start to the week as the market's run toward record highs yet again has spooked investors, leading to a 159-point sell-off on the Dow Jones Industrial Average (DJINDICES:^DJI) as of 2:30 p.m. EDT. Only 11 of the 30 blue-chip member stocks have managed to gain today. Procter & Gamble (NYSE:PG) had risen 1.2% by midafternoon, but Pfizer's (NYSE:PFE) 3.2% loss has led the Dow's painful plunge. Let's catch up on what you need to know.
Pfizer's good news fails to impress
Pfizer's breast cancer drug palbociclib has taken center stage with good news out of its phase 2 trial. The developmental drug extended patients' survival rates without disease progression by a full 10 months, with a combination of palbociclib and the treatment letrozole stopping tumor progression for 20.2 months; letrozole alone halted progression for only 10.2 months. It's a solid result for Pfizer, which has high hopes for the drug.
So why the big downturn for Pfizer's shares? Unfortunately for the company, some analysts quickly turned on the results, pointing out that the gap between cancer progression in treatments with palbociclib and those without had closed from the trial's midpoint, when palbociclib had held off tumor progression for more than 18 months compared to a control treatment. Despite the concerns regarding overall survival rates, palbociclib looks like it could grow to be a behemoth for Pfizer. Analysts have pegged peak sales estimates at up to $5 billion, and the company's still hoping to gain an accelerated review for approval from U.S. regulators. Don't let today's fall disrupt your opinion of Pfizer's road ahead.
Elsewhere on the Dow, Procter & Gamble has hiked its quarterly dividend by 7%, from $0.60 per share to $0.64 per share. P&G has long been among the Dow's best dividend darlings, with its 3% dividend yield and manageable 64% dividend payout ratio, along with its steady cash flow via diversification, making it one of the most reliable blue-chippers for income investors. It's hard to recommend against the stock for dividend investors: Today's raise marks the 58th straight year of a dividend increase for P&G. Although the company has looked to cost-cutting in order to spur growth and fight concerns that it's lagging behind rivals as of late, Procter & Gamble remains a great foundation stock for long-term investors.
Around the markets today, biotech stock Questcor (NASDAQ: QCOR) had jumped by 14.2% so far. What's new for this pick? Irish pharmaceutical company Mallinckrodt (NYSE:MNK) agreed to purchase Questcor for $5.2 billion. Mallinckrodt hopes to capitalize on Questcor's Acthar Gel, a treatment for multiple sclerosis. Mallinckrodt's shares have fallen by more than 5.65% on the day, but for Questcor and biotech investors, it's another example of how the right buyout can bring big rewards.