Stocks rise amid word of huge pharma deals

Wall Street's recent rally continues to roll along as stocks closed higher Tuesday and the Standard & Poor's 500 index posted gains for a sixth straight session.

Tuesday's gains were fueled by solid earnings reports and a batch of large pharmaceutical deals.

The Dow Jones industrial average rose 65 points, or 0.4% to 16,514, according to preliminary calculations. The S&P 500 gained 8 points, or 0.4%, to 1,880 and is now only 10 points below its record closing high of 1,890.90. The Nasdaq composite index rose 39, or 1% to 4,161.

The market's gains over the past week have been driven by a combination of factors, said Phil Orlando, chief equity strategist at Federated Investors. "We were definitely oversold, there's no question about that," Orlando said. "Earnings, by and large, haven't been worse than we thought and the economic news has actually been a little better."

In a three-part deal, GlaxoSmithKline said it would sell its oncology unit to rival drug maker Novartis in a deal worth around $16 billion that will affect 15 thousand employees globally. GSK is also selling its animal-health operation to Eli Lilly for $5.4 billion. Novartis is selling its vaccines business to GSK for about $7 billion.

Stock in Botox maker Allergan soared more than 15% to $163.65 on the news of a $45 billion, Bill Ackman-backed takeover bid by Valeant Pharmaceuticals of Canada. Activist investor Ackman is Allergan's largest stockholder and his Pershing Square investment company owns a 9.7% stake.

In earnings news, Netflix rose 7% to $373 after the online video streaming service said its first-quarter earnings soared.

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Harley-Davidson jumped 7% to $72.14 after it reported a nearly 19 percent rise in first-quarter earnings.

McDonald's said Tuesday that its first-quarter sales at its U.S. restaurants fell 1.7% and profit fell to $1.2 b! illion, or $1.21 per share. Analysts expected $1.24 per share. Shares fell 0.3% to $99.38.

In economic news, existing home sales in March fell for the third straight month to their lowest rate since July 2012, the National Association of Realtors said Tuesday.

Markets in Europe were strong, with Germany's DAX advancing 2% by the close. The CAC 40 in France ended up 1.2%, while Britain's FTSE finished 0.9% higher.

Tokyo's Nikkei 225 benchmark index fell 0.9‰ and Hong Kong's Hang Seng index slid 0.1%.

Oil slipped but stayed above $100 barrel amid the tension in Ukraine.

Contributing: Paul Davidson, John Waggoner

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