U.S. markets were modestly higher today after a four-day decline as traders refocused from the Federal Reserve’s actions and geopolitical concerns to fret anew about the strong U.S. dollar’s effect upon upcoming first-quarter earnings.
In addition, the University of Michigan consumer sentiment reading for March fell from 95.4 to 93 in February. That was slightly above Street estimates.
Near the end of the day, Fed Reserve Chairman Janet Yellen said that a rate increase may be necessary later this year, and that it is not essential for core inflation to go higher for the Fed to act.
The Dow Jones Industrial Average and the S&P 500 rose 0.2%, while the Nasdaq Composite moved 0.6% higher.
Healthcare and utility stocks were the strongest sectors today. There was big news from Dow Chemical Co (NYSE:DOW), which along with Carnival Corp (NYSE:CCL) and BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) are three of today’s best stocks.
Dow Chemical Co (DOW)
DOW stock rose almost 3% after the chemical manufacturer announced a $5 billion deal to splinter off a large part of its chlorine operations and merge it with Olin Corporation (NYSE:OLN). The merger is in large part due to pressure from Third Point LLC, a hedge fund, for Dow to separate its chemical operations from the petrochemical divisions.
The deal will see $2 billion in cash and equivalents be paid to Dow, along with an estimated $2.2 billion in OLN stock, and about $800 million in pension assumptions and other debts.
Carnival Corp (CCL)
CCL investors were popping the champagne corks after CCL stock streaked 6.1% higher today on an earnings beat. The largest cruise line company reported first-quarter earnings of 20 cents a share, well ahead of the Zacks estimate of 9 cents a share and even better than CCL’s previously reported guidance of 11 to 17 cents a share. A year ago, CCL merely broke even for the same quarter.
Net income of $49 million was up from $20 million a year ago, but revenue of $3.5 billion was below the consensus estimate of nearly $3.6 billion.
Lower gasoline prices accounted for some of the increased earnings. CCL also announced it has ordered nine new cruise ships as part of their fleet replacement program.
BioMarin Pharmaceutical Inc. (BMRN)
BMRN stock blistered up more than 11.4% after Deutsche Bank analyst Robyn Karnauskas said that BMRN shares could move close to $300 over the next 12 months. The stock finished today at nearly $129.
Karnausakas suggested that BMRN could be a takeover candidate because it has several promising drugs still in its pipeline, including drugs for hemophilia, dwarfism and Duchenne muscular dystrophy. It is also working on drugs for Pompe disease and Batten disease, a deadly degenerative nerve disorder.
BMRN stock has been on a tear recently, trading more than 90% higher since October.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.