On The Fly: Top stock stories for Wednesday
Stocks began the session in negative territory and remained there throughout the day. There was little for bulls to get excited about as the early data on existing home sales and later on energy inventory levels were disappointing. Oil prices fell following the inventory news, providing another headwind for the market. Also hurting the market was the drug sector, which sold off as media and lawmaker attention on price hikes for Mylan's (MYL) allergy rescue treatment EpiPen have reignited furor over pricing across the broader pharmaceutical industry. ECONOMIC NEWS: In the U.S., existing home sales dropped 3.2% in July to a rate of 5.39M, versus a consensus forecast for a sales rate of 5.51M. The FHFA home price index rose 0.2% to 234.8 in June. Crude oil inventories showed a 2.5M barrel build for week of August 19 versus consensus for a 850,000 draw. COMPANY NEWS: Pfizer (PFE) announced that it has entered into an agreement with AstraZeneca (AZN) to acquire the development and commercialization rights to its late-stage small antibiotics business in most markets globally outside the U.S. The agreement involves three approved antibiotics and two drugs in clinical trials... Shares of Teva (TEVA) fell 2.95% after the U.S. Patent and Trademark Office's Patent Trial and Appeal Board, or PTAB, determined that Mylan and Amneal Pharmaceuticals met their "burden of proving the unpatentability of claims 1-20 of the '250 patent by a preponderance of the evidence." The parties and Teva have been litigating over the '250 patent related to the company's relapsing-remitting multiple sclerosis treatment Copaxone. Mylan also ended the trading session in the red, following news of additional scrutiny surrounding the pricing of its EpiPen product, including criticism by Democratic presidential candidate Hillary Clinton and an information request from the Senate Special Committee on Aging... Shares of Express (EXPR) dropped 25.5% after the apparel and accessories retailer reported worse than expected second quarter results and lower than expected guidance. Following the earnings release, Deutsche Bank, Wedbush and Piper Jaffray were among the firms that downgraded the stock. MAJOR MOVERS: Among the notable gainers was Lannett (LCI), which advanced 13.7% following better than expected fourth quarter results and fiscal year 2017 guidance. Also higher was PharMerica (PMC), which gained 13.39% after a news report that the company is working with banks to explore strategic alternatives, including a potential sale. The pharmacy manager for long-term care facilities has attracted interest from private equity firms, but there is no certainty that it will sell itself, according to Reuters. Additionally, Craft Brew Alliance (BREW) rose 22.48% after expanding its ties to Anheuser-Busch Inbev (BUD), which included distribution and brewing contracts likely to yield significant cost savings and established terms of a potential buyout by the beer giant. Among the noteworthy losers was Garmin (GRMN), which dropped 5.74% after Goldman Sachs analyst Simona Jankowski downgraded the stock to Sell as she expects decelerating results for its Fitness and Outdoor segment to drive underperformance. The sell recommendation also comes ahead of the release of competing products from some of the company's rivals. Also lower was La-Z-Boy (LZB), which slipped 12.69% after first quarter earnings missed expectations. Additionally, New Media Investment (NEWM) slid 8.88% after being downgraded to Sell from Neutral at Citi. INDEXES: The Dow fell 65.82, or 0.35%, to 18,481.48, the Nasdaq lost 42.38, or 0.81%, to 5,217.69, and the S&P 500 declined 11.46, or 0.52%, to 2,175.44.