Shares edge higher on Internet, healthcare stocks

Mon May 19, 2014 4:28pm EDT
 
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By Herbert Lash

NEW YORK (Reuters) - Global equity markets edged higher on Monday as Wall Street rose on Internet and healthcare stocks, while declining yields on government debt also initially provided U.S. equities a lift.

Pfizer's failed bid for AstraZeneca weighed on European shares earlier in the session, with the British drugmaker the biggest drag on the FTSE 100 .FTSE in London and the pan-regional FTSEurofirst 300 index .FTEU3.

But Pfizer rebounded on the failed bid. At one point, it was the second-largest contributor to gains in the S&P 500 index, after Apple. Pfizer rose 0.5 percent at $29.28 a share, while AstraZeneca closed down 11.1 percent in London.

Treasuries at first rallied. Yields on the benchmark 10-year U.S. Treasury note fell to 2.51 percent, near October lows, but later traded higher at almost 2.55 percent.

Analysts had expected interest rates to rise, but with rates touching seven-month lows, the bond rally has helped U.S. stocks and kept at bay a long-expected correction.

"The big story is the bond market, that is the one thing that stands out like a sore thumb," said Stephen Massocca, managing director at Wedbush Equity Management LLC in San Francisco.

"If we did not get this big decrease in rates, the (stock) market would've corrected," Massocca said. "It is maybe preventing a decline, of which we are a little overdue in the stock market."

The Dow Jones industrial average .DJI closed up 20.55 points, or 0.12 percent, to 16,511.86. The S&P 500 .SPX gained 7.22 points, or 0.38 percent, to 1,885.08 and the Nasdaq Composite .IXIC added 35.227 points, or 0.86 percent, to 4,125.815.   Continued...

 
Traders work on the floor of the New York Stock Exchange April 11, 2014. REUTERS/Brendan McDermid