NEW YORK, Oct 29 — Wall Street stocks dipped early today in a move attributed to profit taking as drug company Allergan rose sharply on news of merger talks with Pfizer.
About 45 minutes into trade, the Dow Jones Industrial Average stood at 17,739.86, down 39.66 points (0.22 per cent).
The broad-based S&P 500 fell 2.06 (0.10 per cent) to 2,088.29, while the tech-rich Nasdaq Composite Index dropped 17.91 (0.35 per cent) to 5,077.78.
The Commerce Department reported that third-quarter US economic growth slowed to an annual rate of 1.5 per cent, in line with expectations, from a 3.9 per cent pace in the second quarter. Some aspects of the report were solid, including a 3.2 per cent rise in consumer spending.
Briefing.com analyst Patrick O’Hare said the drop in US stocks was “a clear profit-taking move” given positive news, such as a declining trend in US jobless claims and progress on a congressional deal to avert a US government shutdown.
US stocks are up about nine per cent in October, including a rally yesterday following a more upbeat economic appraisal by the Federal Reserve.
Allergan jumped 8.8 per cent after confirming it is in “preliminary friendly discussions” with Pfizer about a possible merger. Allergan’s market capitalisation of US$112.5 billion means a deal could be the biggest of the year. Pfizer fell 0.8 per cent.
PayPal fell 1.5 per cent after reporting that third-quarter net income rose 28.6 per cent ot US$301 million. Analysts said the digital payments industry faces rising competition from a wide range of players, including JPMorgan Chase and Apple.
MGM Resorts gained 5.7 per cent as third-quarter profit came in at US$66.4 million, up from a US$20.3 million loss in the year-ago period following higher hotel occupancy and casino revenues in Las Vegas.
Other companies with large moves followings earnings reports included Buffalo Wild Wings (-16.8 per cent), GoPro (-16.4 per cent) and NXP Semiconductors (-17.2 per cent).
Bond prices fell. The yield on the 10-year US Treasury rose to 2.14 per cent from 2.09 per cent yesterday, while the 30-year advanced to 2.92 per cent from 2.87 per cent. Bond prices and yields move inversely. — AFP
