The health care sector led U.S. stocks and exchange traded funds (ETFs) higher this morning, helped by a Senate vote on health care reform and merger activity in the drug sector.
There was more M&A activity in the pharmaceutical sector this morning as French drug firm Sanofi-Aventis (NYSE: SNY) stepped up its move into consumer drugs by entering the U.S. market and acquiring Chattem (NASDAQ: CHTT) for $1.9 billion. Seeking to offset the loss of sales of drugs with expiring patents, Sanofi is increasing its presence in the over-the-counter drug market, reported Mimosa Spencer for The Wall Street Journal. Chattem is known for products such as Icy Hot pain-relieving patches and ACT mouthwash.
The iShares S&P Global Healthcare Index Fund (NYSE: IXJ) is up nearly 0.5% this morning and is up about 18% year-to-date. [For more stories on the pharmaceutical sector, please visit our pharmaceuticals category.]
The Treasury yield curve – the difference between the 2- and 10- year note – widened to a record as investors bet on an accelerating U.S. recovery. The yield curve touched 281 basis points earlier today, reported Cordell Eddings for Bloomberg. The benchmark 10-year note rose by 11 basis points, or 0.11 percentage point, to 3.64%, the highest since Aug. 13. The gap between yields on Treasuries and so-called TIPS due in 10 years, closed above 225 basis points for four days last week, the longest stretch since August 2008.
The iShares Barclays 7-10 Year Treasury Bond Fund (NYSE: IEF) is down nearly 0.75% this morning while the iShares Barclays TIPS Bond Fund (NYSE: TIP) is about 0.4%. (For more stories on Treasury-ETFs, please see our Treasury ETFs category).
Gold gained this morning as demand continued for the metal as an alternative investment class. The price rose to about $1115 per ounce. Prices rose as geopolitical concerns lingered about the Iran-Iraq dispute over an oil field, report Nicholas Larkin and Kim Kyoungwha for Bloomberg. On Friday, gold holdings in the biggest exchange traded fund backed by the metal – the SPDR Gold Trust (NYSE: GLD) rose by 6.1 million tons. (For more stories on gold, please visit our gold category).
Tony D’Altorio contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.