Stocks snapped a two-day losing streak Wednesday, with the previously downtrodden healthcare sector leading the way. That is important because healthcare is the third-largest sector weight in the S&P 500 and that helped the benchmark U.S. index to a gain of more than 1% today.
Leadership also arrived courtesy of the energy patch, helping the Dow Jones Industrial Average to a gain of nearly two-thirds of a percent. With help from soaring biotechnology names, the Nasdaq Composite jumped nearly 1.6%.
Analyst commentary, takeover speculation and the possibility of another big deal being scuttled lifted Apple Inc. (NASDAQ:AAPL), Baker Hughes Incorporated (NYSE:BHI) and Celgene Corporation (NASDAQ:CELG) to best stocks of the day status.
Apple Inc. (AAPL)
Apple rose more than 1% after Needham initiated coverage on shares of the iPhone maker with a “strong buy” rating and a price target of $180 a share. That implies upside of over 60% from where AAPL shares closed today. The research firm highlighted pricing power and predictable revenue avenues as catalysts for AAPL shares.
Needham analyst Laura Martin said in an interview with CNBC that AAPL commands 16% of the global smartphone market. The analyst also cited other businesses, such as Apple Pay, as revenue drivers.
Shares of AAPL are up over 5% year-to-date.
Baker Hughes Incorporated (BHI)
Shares of oilfield services provider Baker Hughes surged 8.8% on more than triple the average daily volume even after the Justice Department sued to prevent Halliburton Company (NYSE:HAL) from acquiring BHI.
HAL’s effort to acquire BHI, initially unveiled in November 2014 at a value of $35 billion, has been under constant scrutiny since being announced, with consistent speculation that the deal would draw the ire of regulators due to anti-competitive concerns. The U.S. government argues the combined Halliburton-Baker Hughes and Schlumberger Limited (NYSE:SLB) would dominate the oilfield services industry.
HAL has tried selling some businesses to appease regulators. The company said it will contest the Justice Department’s suit. Analysts feel HAL would be better off than BHI if the deal collapses.
Celgene Corporation (CELG)
Shares of biotechnology giant Celgene climbed nearly 6% amid a broader rally for biotech stocks. That rally was fueled in part by speculation that with Dow Jones Industrial Average member Pfizer Inc. (NYSE:PFE) and Allergan Plc (NYSE:AGN) walking away from their $160 billion marriage due to inversion concerns, both companies could hunt for new takeover targets, including biotech names such as CELG.
Shares of CELG are down over 9% year-to-date, though that is better than the Nasdaq Biotechnology Index.
At the time of this writing, Todd Shriber did not own shares of any of the aforementioned securities.
