Stocks Rebound From Thursday’s Losses to End Higher

U.S. Market
Stocks moved higher today after Thursday’s losses.

Consumer sentiment fell in early July according to the Reuters/University of Michigan survey. The reading of 81.3 was down from the end of June reading of 82.5 and below expectations of 83.0. One-year inflation expectations rose to 3.3% from 3.1%.

At market close the Dow, S&P 500 and Nasdaq were up 0.7%, 1.0% and 1.6% respectively.

Stocks on the Move
Shares of General Electric (GE) were down less than 1% after the firm reported second-quarter results. The firm said its profit was up 13% year-over-year as revenue increased 3.4%, in line with expectations. The firm also said it plans to raise $3.1 billion by selling a 15% stake of its North American consumer-finance arm Synchrony in an IPO by the end of this month.

AbbVie (ABBV) announced on July 18 that it has reached an agreement with Shire (SHPG) on the final terms of its takeover offer, which is GBP 22.44 in cash and 0.8960 shares of AbbVie resulting in a value GBP 52.48 per Shire share based on AbbVie’s price of $53.52 at the market's close on July 17. This represents approximately $259 per Shire ADR.We continue to view the lower tax rate as driving AbbVie's interest in Shire. Using a tax inversion with the lower United Kingdom tax rate, AbbVie projected the Shire acquisition could reduce its tax rate to 13% by 2016, down from our projected tax rate of 22%. Shares of AbbVie rose over 2.5% on the announcement.

Google (GOOG)(GOOGL) logged another dependably strong quarter, notable only by a lack of surprises in growth, margins, or pricing metrics Revenue and profitability for the quarter were generally in line with our estimates, as heavy investment in data centers and more nascent products and services (for example, hardware, Google Compute Engine, and Google Fiber) depressed operating margins, in our view. As a sign of strength in the core business, overall revenue increased 21.7%, driven by products such as Google Search and YouTube. Furthermore, growth in clickable ad revenue rose 18% versus 2013's levels, implying greater contribution from display advertising, such as YouTube's TrueView ads, and the "other" segment, including Google cloud-related products and hardware. Google A Shares were up over 4% at market close.