Pfizer's Ills Aren't Contagious
12/04/06 - 05:18 PM EST
Liz Rappaport
Pfizer(PFE Quote - Cramer on PFE - Stock Picks) didn't play its usual safe, defensive role in the stock market Monday. Instead, the pharmaceutical company's stock was the blood-red splotch on mostly green trading screens across Wall Street.
Pfizer's shares fell 10.6% on news the company halted research on its cholesterol drug torcetrapib, a move that sparked several analyst downgrades. Nevertheless, the S&P 500 closed at a new high for the year, up 0.9% to 1409.12. The Dow Jones Industrial Average gained 0.7% to close at 12,283.85, with all of its components gaining ground, save Pfizer and Merck(MRK Quote - Cramer on MRK - Stock Picks), which slid 0.8%. The Nasdaq Composite was up 1.5% to close at 2448.39 Monday. Without any economic data Monday, the markets gravitated to their instinctive paths -- up for stocks, down for bond yields. The stock market shrugged off last week's dollar woes as another swath of merger and acquisition activity sparked buying once again. The biggest deal was in the financial sector, where Bank of New York(BK Quote - Cramer on BK - Stock Picks) and Mellon Financial(MEL Quote - Cramer on MEL - Stock Picks) agreed to a $16.5 billion stock-swap merger, which sent the two financial companies' shares up 11.7% and 6.5%. Other securities processing and custodial banks rose in sympathy, and speculation of more consolidation, with Northern Trust (NTRS Quote - Cramer on NTRS - Stock Picks) up 3.5% and State Street (STT Quote - Cramer on STT - Stock Picks) higher by 5%. Also, chipmaker LSI Logic(LSI Quote - Cramer on LSI - Stock Picks) is acquiring Agere(AGR Quote - Cramer on AGR - Stock Picks) for $4 billion in stock. LSI's shares fell 13.6%, while Agere's gained 8.4%. Lastly, Station Casinos(STN Quote - Cramer on STN - Stock Picks) agreed to an $82 per share buyout offer from CEO Frank Fertitta and private equity firm Colony Capital. Station's shares soared 21.7%.
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