The markets are starting May in style, a nice change from yesterday's declines to end April. In a reversal from yesterday's sour Midwest factory data, the April ISM came in at 54.8, an increase of 1.4 from March, easily outpacing an anticipated sequential decline. With that in mind, let's take a closer look at how the major indexes are faring today and drill down on a few stocks driving today's action.
Dow Jones Industrial Average (INDEX: ^DJI)
Source: Yahoo! Finance.
Materials companies like Alcoa (NYS: AA) are seeing residual action, as shares of the aluminum manufacturer are up 2.8%, but economic enthusiasm has also spread to the banking industry; Bank of America (NYS: BAC) leads all Dow components with a 3.4% gain.
Earnings fell 19% for big pharma giant Pfizer (NYS: PFE) as uber-blockbuster Lipitor's sales cratered 42% during its first full quarter of generic competition. To combat the patent cliff, Pfizer is going through a radical transformation that refocuses the company on its pharmaceutical business. The company recently sold its nutrition business to Nestle for almost $12 billion, and when the animal health division is sold, it should bring in an additional $18 billion. That war chest will help restock a pipeline that already has exciting drug candidates like blood thinner Eliquis awaiting FDA approval. Investors weren't surprised by Pfizer's near-term challenges and shares are roughly flat for the day.
On the flip side, investors we caught off guard by criticism aimed at Herbalife (NYS: HLF) from famed short-seller David Einhorn. Shares are down almost 25% after Einhorn had very pointed questions for Herbalife's management on today's conference call regarding distributor data. Despite a great quarter that surpassed expectations on both top and bottom lines, Einhorn's presence could mean that Greenlight Capital may be targeting Herbalife as an overvalued company.
Get ready for more surprises
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At the time thisarticle was published David Williamson owns shares of Pfizer, but he holds no other position in any other companies mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Bank of America. Motley Fool newsletter services have recommended buying shares of Pfizer. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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