NEW YORK (Reuters) – U.S. stocks were modestly higher on Monday, after the benchmark S&P 500 notched its best weekly performance in nearly two months, as a sharp drop in Gilead Sciences reined in broader gains.
Gilead Sciences (GILD.O) slumped 9.9 percent to $97.71 as the biggest drag on both the S&P and Nasdaq 100 .NDX indexes. Express Scripts (ESRX.O), the nation’s largest pharmacy benefit manager, has lined up a cheaper price from AbbVie Inc (ABBV.N) for its newly approved hepatitis C treatment and, in most cases, will no longer cover Gilead’s treatments.
“That is very specific to Gilead, so that one is getting crushed, but it shouldn’t necessarily set a completely negative tone over the rest of the market, there is no reason for it,” said Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York.
“The market has had a decent move the last couple of days, so anything could cause people to take a little money off the table.”
The benchmark S&P index .SPX rose 3.4 percent last week, boosted by a 5 percent jump over three sessions, after the U.S. Federal Reserve said it would take a “patient” approach toward raising interest rates and oil prices appeared to stabilize. The S&P energy index .SPNY surged nearly 10 percent for the week.
Brent crude LCOc1 hit a high of $62.97 and WTI crude rose to as much as $58.53 but reversed gains and turned lower after Saudi Arabia indicated it could increase its output. Brent was last down 54 cents at $60.84 while U.S. crude was last off 1.6 percent at $56.24. [O/R]
The Dow Jones industrial average .DJI rose 84.7 points, or 0.48 percent, to 17,889.5, the S&P 500 .SPX gained 2.68 points, or 0.13 percent, to 2,073.33 and the Nasdaq Composite.IXIC added 11.64 points, or 0.24 percent, to 4,777.02.
Housing shares were lower after existing home sales slumped 6.1 percent to an annual rate of 4.93 million units, the lowest level since May. The PHLX housing sector index lost 0.5 percent.
Trading volume is expected to be light this week due to the Christmas holiday, which could increase volatility. U.S. equity markets will open for an abbreviated session Wednesday and be closed on Thursday.
Achillion Pharmaceuticals Inc (ACHN.O) said it would test a combination of two of its experimental hepatitis C drugs which showed promise in separate studies. Its shares surged 17 percent to $16.63.
Caesars Entertainment Corp (CZR.O) said it would merge with affiliate Caesars Acquisition (CACQ.O) in an all-stock deal. Caesars Entertainment jumped 20 percent to $16.18 while Caesars Acquisition rose 8.1 percent to $10.23.