Merck Drops A Bomb
Stocks are lower after
Merck dropped a bomb.
Merck
(
MRK |
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PowerRating) will withdraw its arthritis drug VIOXX, effective
immediately, citing risk of heart disease. 2003 sales were $2.5 billion and the
effect of EPS is anticipated to be $0.50-$0.60. In Q4, Merck estimated they lost
between $700-$750 million in sales on the drug. VIOXX is the company’s second
largest selling drug. A study indicated that patients taking VIOXX had a 50%
greater chance of heart attack. Shares of MRK gapped down. Large block trades
are going off on MRK–average trade 60,000-70,000 shares.
Pfizer
(
PFE |
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PowerRating) gapped up on the news.
Pfizer has a competing drug, Celebrex. PFE gapped higher and sold off to
near-unchanged.
For the Dow and S&P, Q3 is worst performance
since Q1 2003. For Q3, semiconductors lost 20%.
| Dow | -87.38 | 10049.45 |
| S&P 500 | -4.04 | 1110.76 |
| Nasdaq | -4.14 | 1889.80 |
Strong sectors are: Healthcare
Payors
(
HMO.X |
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PowerRating) -3.55%, CyclicalsÂ
(
XCI.X |
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PowerRating) +2.68%, Semis
(
SOX.X |
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PowerRating)
+2.35%.
Weak are: Pharmaceuticals
(
DRG.X |
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PowerRating) -8.06% and Healthcare
(
HCX.X |
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PowerRating) -7.03%.
10-year Notes are -120 at 112 130
The dollar
are -0.58 at 87.52.
Gold are +5.70 at 416.80
Crude Oil is +0.38 at 49.89
747 million on the Nasdaq.
Market breadth is mixed.
| NYSE | Issues | |
| Advancing | 1653 | Up Vol 313 |
| Declining | 1437 | Down Vol 312 |
| Ratio | 1.15 | 1.00 |
| Nasdaq |
||
| Advancing | 1267 | Up Vol 304 |
| Declining | 1594 | Down Vol 392 |
| Ratio | 1.25 | 1.28 |
Stocks in the News
IBM will take a $320 million charge in Q3.
Amkor
(
AMKR |
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PowerRating) cut its outlook.
Actuant
(
ATU |
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PowerRating) beat estimates.
Pepsi’s
(
PEP |
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PowerRating) profit rose and the company guided higher.
Brice Wightman