Rebound in the Healthcare Sector with Mallinckrodt at the Lead
Corporate Earnings and Quantitative Easing Drove Markets High on October 23
Key stocks
The stocks at the top of the SPDR S&P 500 ETF (SPY) on October 23, 2015, were Mallinckrodt (MNK), Microsoft (MSFT), and Endo International (ENDP). These stocks gained 12.2%, 10.1%, and 10.0%, respectively, on the day.
The above graph shows the performances of the healthcare stocks Mallinckrodt and Endo International and the Health Care Select Sector SPDR ETF (XLV) for the month of October 2015.
Mallinckrodt has a beta of 1.41, which is highly sensitive to broad market movement. The stock traded at $65.75 above its 20-day moving average of $64. The stock’s trading volume surged to 4,520,000 on Friday from 4,355,000 stocks on the previous day.
The stock has earned ten “buy,” seven “hold,” and no “sell” recommendations. Barclays has maintained its current rating of “overweight” on the stock.
The stocks at the bottom of the SPDR S&P 500 ETF on October 23, 2015, were Stericycle (SRCL), VF Corp (VFC), and Whirlpool (WHR). These stocks yielded -19.3%, -12.9%, and -8.7%, respectively, on the day.
Stericycle fell to the bottom as the company missed market expectations on both the revenue and the earnings fronts. The company reported earnings per share of $1.08 against an expected $1.18 per share and revenue of $718.6 million against analyst expectations of $734.6 million for the quarter.
Material stocks
Stocks belonging to the material and mining sector rose too on Friday, October 23, 2015. The Materials Select Sector SPDR ETF (XLB) gained 0.83% on the day. The rise in the sector was experienced after the release of PMI (purchasing managers’ index) data for the month of October 2015.
The index came in at 54.0 for the month, beating consensus expectations of 53.0. It was boosted by positive domestic demand, thus being a strong economic indicator of the US economy.
Manufacturers’ inventories saw decreases for the successive three months. Also, the input costs of raw materials were low, especially for steel, due to the strong US dollar and falling commodity prices.
Let’s also look at the UK stock market on Friday, October 23, 2015.
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