Stocks rallied Tuesday, but ended off session highs, again led by earnings and takeover news from the drug sector.
The Dow Jones industrial average (^DJI) rose 65 points, the Standard & Poor's 500 index (^GPSC) gained 7, and the Nasdaq composite (^IXIC) jumped 40 points. The Dow has five gains in a row, while the S&P and Nasdaq extended their winning streaks to six sessions.
The European health care firm Novartis (NVS) was at the center of a series of big deals. It bought GlaxoSmithKline's (GSK) cancer drug business for $14.5 billion, then sold its animal health unit to Eli Lilly (LLY) for about $5.5 billion. Let's check all three stocks -- Novartis gained more than 1 percent, Glaxo rose 4 percent, and Lilly fell 1 percent.
Meanwhile, Allergan (AGN), the maker of Botox, jumped 15 percent after receiving an unsolicited takeover bid from Valeant Pharmaceuticals (VRX) and activist investor Bill Ackman. Valeant rose 7 percent.
Speaking of Botox, there's a small company developing a new treatment for frown lines. Revance Therapeutics (RVNC) surged 25 percent on positive test results for the product. Biotech also stocks rallied, with a closely watched index gaining more than 3 percent.
United Technologies (UTX) added less than 1 percent.
On the downside, McDonald's (MCD) edged lower. While the market has soared over the past year, the stock has marched in place, virtually unchanged from a year ago.
%VIRTUAL-article-sponsoredlinks%Kimberly-Clark (KMB) fell 2 percent after posting flat earnings, and Medidata Solutions (MDSO) tumbled 22 percent after missing expectations.
Elsewhere, investors were buying up retail stocks. Dillard's (DDS) gained 5 percent, Abercrombie & Fitch (ANF) added 3.5 percent, Quiksilver (ZQK) rose 4 percent, and Conn's (CONN) jumped 7.5 percent on word that investor David Einhorn bought a big stake.
But Einhorn, who runs Greenlight Capital, also issued a warning, telling his investors that we're in the midst of another tech bubble. He says his firm is now betting against some high-flying momentum stocks.
What to Watch Wednesday:
The Commerce Department releases new home sales for March at 10 a.m. Eastern time.
These major companies are scheduled to release quarterly financial statements:
After Market: S&P 500 Extends Winning Streak to 6 Days
"Your daily habits and routines are the reason you got into this mess," writes Trent Hamm, founder of TheSimpleDollar.com. "Spend some time thinking about how you spend money each day, each week and each month." Do you really need your daily latte? Can you bring your lunch to work instead of buying it four times a week? Ask yourself: What can I change without sacrificing my lifestyle too much?
Remove all credit cards from your wallet and leave them at home when you go shopping, advises WiseBread contributor Sabah Karimi. “Even if you earn cash back or other rewards with credit card purchases, stop spending with your credit cards until you have your finances under control,” she writes.
If you do a lot of online shopping at one retailer, you may have stored your credit card information on the site to make the checkout process easier. But that also makes it easier to charge items you don't need. So clear that information. "If you’re paying for a recurring service, use a debit card issued from a major credit card service linked to your checking account," Hamm writes.
Reward yourself when you reach debt payoff goals. "The only way to completely pay off your credit card debt is to keep at it, and to do that, you must keep yourself motivated," Bakke writes. Just make sure to reward yourself within reason. For example, instead of a weeklong vacation, plan a weekend camping trip. "If you aim to reduce your credit card debt from $10,000 to $5,000 in two months," Bakke writes, "give yourself more than a pat on the back."
“Establish a budget,” writes Money Crashers contributor David Bakke. “If you don't scale back your spending, you'll dig yourself into a deeper hole." You can use personal finance tools like Mint.com, or make your own Excel spreadsheet that includes your monthly income and expenses. Then scrutinize those budget categories to see where you can cut costs.
Sort your credit card interest rates from highest to lowest, then tackle the card with the highest rate first. "By paying off the balance with the highest interest first, you increase your payment on the credit card with the highest annual percentage rate while continuing to make the minimum payment on the rest of your credit cards," writes Mint.com spokeswoman Hitha Prabhakar.
To make a dent in your debt, you need to pay more than the minimum balance on your credit card statements each month. "Paying the minimum -– usually 2 to 3 percent of the outstanding balance -– only prolongs a debt payoff strategy," Prabhakar writes. "Strengthen your commitment to pay everything off by making weekly, instead of monthly, payments." Or if your minimum payment is $100, try doubling it and paying off $200 or more.
If you have a high-interest card with a balance that you’re confident you can pay off in a few months, Hamm recommends moving the debt to a card that offers a zero-interest balance transfer. "You’ll need to pay off the debt before the balance transfer expires, or else you’re often hit with a much higher interest rate," he warns. "If you do it carefully, you can save hundreds on interest this way."
Have any birthday gifts or old wedding presents collecting dust in your closet? Look for items you can sell on eBay or Craigslist. "Do some research to make sure you list these items at a fair and reasonable price," Karimi writes. “Take quality photos, and write an attention-grabbing headline and description to sell the item as quickly as possible." Any profits from sales should go toward your debt.
If you receive a job bonus around the holidays or during the year, allocate that money toward your debt payoff plan. "Avoid the temptation to spend that bonus on a vacation or other luxury purchase," Karimi writes. It’s more important to fix your financial situation than own the latest designer bag.