U.S. Stocks Fluctuate as Health-Care Rally Offsets Crude

By Oliver Renick and Jonathan Morgan  

Dec. 8 (Bloomberg) -- Morgan Stanley Chief U.S. Equity Strategist Adam Parker discusses his investment ideas on “Bloomberg Surveillance.” (Source: Bloomberg)

U.S. stocks fluctuated, after equities climbed for a seventh consecutive week, as a rally in health-care companies offset weaker-than-forecast Chinese trade data and a continued selloff in oil.
Cubist Pharmaceuticals Inc. (CBST) jumped 35 percent as Merck & Co. agreed to acquire the maker of antibiotics. Exxon Mobil Corp. and Schlumberger Ltd. dropped more than 1.3 percent to pace declines in energy shares. McDonald’s Corp. lost 3.5 percent, the most in two years, after same-store sales trailed analysts’ estimates.
The Standard & Poor’s 500 (SPX) Index fell less than 0.1 percent to 2,074.91 at 10:38 a.m. in New York. The Dow Jones Industrial Average dropped 6.96 points, or less than 0.1 percent, to 17,951.83. The Nasdaq 100 Index gained 0.1 percent as health-care companies led the way. Trading in S&P 500 companies was 8.7 percent below the 30-day average for this time of the day.
“Long-term there’s a lot of good news out there,” Robert Pavlik, who helps oversee $4.5 billion as chief market strategist at Banyan Partners LLC in New York, said in
a phone interview. “We had a report on Friday with nonfarm payrolls showing the economy continues to move forward, and the stores remain pretty well-packed with shoppers.”
The S&P 500 capped its longest weekly winning streak in a year last week, closing at a record as better-than-estimated payrolls data increased optimism in the economy. The gauge trades at 18.4 times current earnings, its highest valuation since 2009. The Dow also reached an all-time high last week, climbing within 10 points of 18,000.
The S&P 500 has rebounded 11 percent from a low in October amid speculation the U.S. economy is strong enough to withstand a slowdown overseas and tighter monetary policy after the Federal Reserve wound up its asset-purchase program.

Economic Data

Chinese overseas shipments rose 4.7 percent from a year earlier in November, the customs administration said today. That missed the 8 percent estimate in a Bloomberg News survey. Imports (CNFRIMPY) fell 6.7 percent, compared with projections of a 3.8 percent increase.
U.S. data last week showed employers added 321,000 jobs in November, the most since January 2012, while the unemployment rate held at a six-year low of 5.8 percent. Reports later this week will show U.S. consumer confidence and retail sales improved, according to economists’ estimates.

Oil Slide

Exxon Mobil retreated 1.3 percent and Schlumberger, the world’s biggest provider of oilfield services, slid 2.5 percent. Chevron Corp. dropped 2.8 percent. Brent crude slumped to its lowest price in five years as OPEC’s refusal to cut output targets amid an oversupply prompted some banks to cut price estimates.
Energy shares tumbled 1.9 percent as a group, heading for the lowest closing level since June 2013. Utilities and health-care shares had the largest gains among S&P 500 industries, climbing more than 0.7 percent.
McDonald’s declined 3.5 percent after the world’s largest restaurant chain posted November same-store sales that trailed analysts’ estimates after efforts to revive growth in the U.S. failed to gain traction. Global sales at stores open at least 13 months fell 2.2 percent, the Oak Brook Illinois-based company said today in a statement.
Wynn Resorts Ltd. slipped 1.7 percent. The government of Macau, where Wynn generates more than two-thirds of its sales, forecast lower gaming revenue in 2015.
Cubist Pharmaceuticals jumped 35 percent. Merck agreed to acquire the company for $8.4 billion in cash. Merck will begin a $102-a-share tender offer for Cubist, the companies said in a statement today. Merck fell 0.3 percent.
Celgene Corp. and Gilead Sciences jumped at least 2.2 percent.