What’s A PBM And Why You’ll Be Hearing More About It Soon
Stocks were
mixed Tuesday.
Early on, the
GDP was revised to 8.2% in the Q3, more than double the Q2, and 1% above the original 7.2%,
and consumer confidence also
jumped 10 points to 91.7, signaling continued optimism for recovering economy.
The Nasdaq briefly flirted with 2000 but closed below this level, at 1943, even
after a late-day push up. There was little reaction to the Medicare bill, passed
today. The indices appeared sluggish, but market internals continue to be
strong, with advancers far outpacing decliners and a healthy new high list.
Bonds also advanced.
The Senate approved the most drastic changes to Medicare since its creation in
1965. The program, which kicks in in 2006, is seen as boosting drug sales and
lifting insurers and hospitals. Pharmacy benefit management companies (PBMs)
also stand to benefit, say analysts — companies such as Medco
(
MHS |
Quote |
Chart |
News |
PowerRating) and
Express Scripts
(
ESRX |
Quote |
Chart |
News |
PowerRating) and Caremark
(
CMX |
Quote |
Chart |
News |
PowerRating). Medical equipment makers may
not fare as well, as under the plan prices of some products will be frozen.
Stock funds took in $25.5 billion in October, according to the Investment
Company Institute, and took $1.3 billion out of bond funds; this, as rates rose.
Washington Mutual
(
WM |
Quote |
Chart |
News |
PowerRating) is selling its finance division to Citigroup
(
C |
Quote |
Chart |
News |
PowerRating)] for $1.25 billion. The finance unit concentrates on consumer installment
and real estate-secured loans in the Southeastern and Southwestern states, with
$4.1 billion in assets.
| Dow | +16.15 | 9763.94 |
| S&P | +1.81 | 1053.89 |
| Nasdaq | -4.10 | 1943.04 |
The day’s leading sectors were Gold and Silver
(
$XAU.X |
Quote |
Chart |
News |
PowerRating), +1.78%,
Chemicals
(
$CEX.X |
Quote |
Chart |
News |
PowerRating),
+1.52%,Oil Service Sector
(
$OSX.X |
Quote |
Chart |
News |
PowerRating), +1.41%, and Health
Providers
(
$RXH.X |
Quote |
Chart |
News |
PowerRating),
+1.11%,
Weak today were Hardware
(
GHA.X |
Quote |
Chart |
News |
PowerRating) -1.42%,
Drugs
(
$DRG.X |
Quote |
Chart |
News |
PowerRating), -1.07% and Biotechs
(
$BTK.X |
Quote |
Chart |
News |
PowerRating),
-0.58%.
Economic news releases for
today included a much higher revised GDP number of 8.2% for the third quarter.
Consumer confidence jumped up to 91.7, and existing home sales dipped to 6.35
million.
10-year Notes were +090
at 113 160.
The dollar
was -0.14 at 91.45 .
Gold was -0.23 at
391.68.
Crude Oil was -0.01 at
29.77.
Market breadth was positive.
| NYSE | Issues | |
| Advancing | 2234 | Up Vol 917 |
| Declining | 1035 | Down Vol 401 |
| Ratio | 2.15 | 2.28 |
| Nasdaq | ||
| Advancing | 1897 | Up Vol 1049 |
| Declining | 1314 | Down Vol 717 |
| Ratio | 1.44 | 1.46 |
Volume was
1,333,743,000 on
the NYSE, and 1,819,886,0000 on the Nasdaq.
Stocks in the news:
After the close, H&R Block
(
HRB |
Quote |
Chart |
News |
PowerRating) reported .06 vs a (.06) estimate. The stock mde a 52-week high and
traded up 4% in after market trading.
Novellus
(
NVLS |
Quote |
Chart |
News |
PowerRating)
upgraded its fourth-quarter guidance, citing improved worldwide demand. It now
expects orders to rise 25% to $275 million, with revenue flat around $220
million. Earnings for the next quarter would be at the higher end of the
range.
Deere
(
DE |
Quote |
Chart |
News |
PowerRating) posted a
net income of $70.6 million on a 14% increase in revenue. Revenue rose to $3.94
billion, thanks to a weak dollar. Favorable foreign currency helped boost
worldwide sales outside of North America by 19%.
Xerox
(
XRX |
Quote |
Chart |
News |
PowerRating) received
upgrades from Merrill Lynch and Lehman Brothers after announcing net income
would rise by 35%. It expects earnings for year 2004 to be in the 67 cents to 72
cents range, with earnings for 2005 in the 90 cents to $1 range.
Kodak
(
EK |
Quote |
Chart |
News |
PowerRating) is down after the company
announced plans to buy the digital printing unit of Israel-based Scitex for $250
million. It expects Scitex to add $190 million in revenue for the first year.
Scitex had reported sales of $157 million in 2002 and through the third-quarter,
sales were at $128 million.
If you have any comments or questions, please
feel free to email me.
bricew@tradingmarkets.com