NEW YORK – Stocks closed mostly higher Tuesday on Wall Street as traders got back to work after a long holiday weekend.
It was a fairly quiet day for traders, who had relatively little news to react to.
Health-care stocks rose far more than the rest of the market after pharmaceutical company Actavis said it was buying rival Forest Laboratories for $25 billion in cash and stock.
Investors liked the deal, which is intended to make the companies more competitive in a rapidly changing industry and allow them to command higher prices from insurance companies. Actavis makes the generic versions of hyperactivity disorder medication Concerta and the cholesterol drug Lipitor, while Forest Labs makes the Alzheimer’s treatment Namenda.
Coke reported that its income and sales fell in the fourth quarter compared with the same period a year ago. It said sales volume declined 1 percent in North America, its largest market.
The Forest Labs-Actavis deal is the latest in big-name, big-budget deals to be announced so far this year. Last week, cable giant Comcast announced a deal to buy Time Warner Cable for $45 billion, and Japan’s Suntory Holdings announced last month it was buying Beam, the maker of Jim Beam and Maker’s Mark whiskey, for $13.9 billion.
Investors should expect more large deals this year, said Mike Serio, regional chief investment officer at Wells Fargo Private Bank.
“This has been building up for three or four years now,” he said. “Companies have so much money on their balance sheets, and there’s only so much you can do with it. You could increase your dividend. You could buy back stock. You could spend it on (business investments), or you can do deals.”
The market’s turnaround last week was especially notable given the rough start to the year. The S&P 500 has risen seven out of the last eight days.
“I would be very surprised if we don’t see the market move back to its highs very soon,” said Randy Frederick, a managing director at Charles Schwab.
