Stocks held mixed on Thursday afternoon as Bristol-Myers Squibb (BMY) - Get Report and Celgene (CELG) - Get Report pushed health care higher, while defensive names slipped on a spike in Treasury yields.
The S&P 500 was down 0.07%, the Dow Jones Industrial Average rose 0.03%, and the Nasdaq slid 0.42%.
Bristol-Myers Squibb jumped more than 6% after laying out plans to reorganize, including redirecting spending toward key brands and streamlining certain operations. The drugmaker also topped third-quarter earnings and sales and increased its full-year outlook.
Celgene climbed 6% after raising its outlook for the year following better-than-expected quarterly results. The drugmaker swung to a net profit of 21 cents share over its September-ended quarter, up from a loss of 4 cents a year earlier. Adjusted income of $1.58 a share exceeded estimates by a dime.
The yield on the U.S. 10-year Treasury note hit its highest level since May on Thursday, climbing to 1.855% from 1.790% a day earlier. Yields rose as bond prices fell on diminished hopes over further monetary stimulus from some of the world's largest central banks.
The chances of further stimulus from the Bank of England weakened after a stronger reading on U.K. GDP in the third quarter. Stimulus from the Bank of Japan also looked less likely after Gov. Haruhiko Kuroda said there was no need to change Japan's negative 0.1% short-term interest rate target nor its 10-year government bond yield target. Kuroda said the bank would not attempt to reduce long-term government bond yields.
An increase in 10-year yields pulled defensive stocks in the utilities and basic materials sectors into the red. Exelon (EXC) - Get Report , NextEra (NEE) - Get Report , and American Electric Power (AEP) - Get Report moved lower, while the Utilities SPDR ETF (XLU) - Get Report slid 1%. Materials stocks including AK Steel (AKS) - Get Report , United States Steel (X) - Get Report and Vale (VALE) - Get Report also moved lower.
Twitter (TWTR) - Get Report was 1% higher, down from gains of around 5% earlier in the day. Shares had rallied after the company bested quarterly estimates and detailed plans to cut 9% of its workforce. The Jack Dorsey-led company reported adjusted earnings of 13 cents a share on revenue of $616 million. Analysts had expected adjusted earnings of 9 cents a share on $606 million in revenue. Twitter has been in the crosshairs since a round of acquisition offers from Salesforce.com and Walt Disney fell apart earlier this month.
Tesla (TSLA) - Get Report rose more than 4% after reporting a surprise profit in its third quarter. The electronic automaker earned an adjusted 71 cents a share, far better than an expected net loss of 54 cents. Tesla hadn't reported a quarterly net profit in more than three years. Revenue surged 145% to $2.3 billion and topped estimates by $100 million. Tesla's adjusted gross margins also improved to 25% from 23.6% in the second quarter and full-year gross margins are expected to increase by 2 to 3 percentage points.
New orders for capital goods made in the U.S. dropped unexpectedly in September as demand for computers and other electronics weakened. Capital goods orders fell 1.2% last month, according to the Commerce Department, after three months of gains. Capital goods orders are used as an indicator of future business spending. U.S. durable goods orders dropped 0.1% in September. Analysts had expected orders to rise 0.2%.
Crude oil prices bounced on Thursday, coming back from a three-week low reached a day earlier. Prices fell on Wednesday as hopes of a production freeze agreement among Organization of the Petroleum Exporting Countries faded. Iraq, the second largest producer in the bloc, has expressed reluctance to join in on a deal. OPEC members are set to meet in Vienna at the end of November.
West Texas Intermediate crude oil closed 1.1% higher at $49.72 a barrel on Thursday, snapping a three-session losing streak.
Strong demand in the U.S. housing sector boosted pending home sales to a higher level than expected in September. The National Association of Realtors' index climbed to 110, up 1.5%, on growth in the West and South markets. Activity increased 1.9% in the South and 4.7% in the West.
Initial claims for unemployment benefits in the U.S. fell by 3,000 to 258,000 in the past week, according to the Department of Labor. Analysts had expected a decline of 255,000. The less-volatile, four-week average rose 1,000 to 253,000.
In other earnings news, Ford (F) - Get Report moved 1% lower after a recent safety recall drove profits sharply lower. Third-quarter net income fell 56% from a year earlier, though operating profit of 26 cents a share beat analysts' forecasts by 6 cents. Profits were reduced by $600 million in expenses related to a door-latch recall. Overall revenue fell 6%, dragged down by by weaker sales in the core U.S. market.
Potash (POT) reported double-digit declines in profit and sales over its recent quarter as the price of fertilizer nutrients continued to decline. Net income fell 71% to 10 cents a share, though beat analysts by a penny. Sales declined 26% to $1.14 billion.
Dow Chemical (DOW) - Get Report increased nearly 3% after a better-than-expected third quarter. The chemicals company earned an adjusted 91 cents a share, breezing past estimates of 79 cents. Sales rose to $12.48 billion, above consensus of $11.93 billion.
Qualcomm (QCOM) - Get Report finally reached a deal to buy NXP Semiconductors (NXPI) - Get Report after protracted negotiations. The chipmaker will purchase NXP for $110 a share in cash, or $47 billion. The deal represents an 11% premium to NXP's Wednesday close. Qualcomm anticipates synergies of $500 million after the deal closes. NXP shares jumped nearly 3%.
NXP has been a holding in Action Alerts PLUS since the beginning of this year and it's the trust's No. 1 ranked stock within its value index. AAP has held a "Buy" (One) rating and $110 price target since initiation.
"We are excited to see the formerly under-the-radar company acquired for $110 in cash, 38% above our cost basis, validating the company's leadership across autos and ability to deliver products which provide the elusive ability to offer connectivity and security," said Jack Mohr, research director for Action Alerts PLUS.
Groupon (GRPN) - Get Report agreed to purchase LivingSocial, one of its big competitors in the online discounts market. Groupon did not disclose the price it paid, but said the cost was not material. The purchase is expected to add 1 million active customers.