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US stocks lift on pharma deals

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Solid earnings and major pharmaceutical-sector deals have lifted US stocks, producing a sixth straight day of gains for the S&P 500 and Nasdaq Composite Index.

The Dow Jones Industrial Average rose 65.12 points (0.40 per cent) to 16,514.37, the third day in a row to see a gain.

The S&P 500 added 7.66 (0.41 per cent) at 1,879.55, while the Nasdaq put on 39.91 (0.97 per cent) to 4,161.46.

A series of deals between pharmaceutical giants Novartis, GlaxoSmithKline and Eli Lilly shuffled more than $US20 billion ($A22 billion) in assets.

“If you look at the market overall, we see a lot of beats in terms of earnings,” said David Levy, portfolio manager at Kenjol Capital Management.

“The market sentiment seems to have turned much more positive.”

Levy said the tech stocks have re-emerged as leaders after languishing for much of March and early April.

These include Facebook (+2.9 per cent), Tesla Motors (+7.0 per cent) and Gilead Sciences (+1.8 per cent).

Video-streaming company Netflix shot up 7.0 per cent as quarterly revenues topped $US1 billion and the company added four million new subscribers.

Valeant Pharmaceuticals, backed by activist shareholder William Ackman, offered to acquire Botox-maker Allergan for more than $US45 billion.

Valeant gained 7.5 per cent, while Allergan rose 15.3 per cent.

Dow member McDonald’s reported a 5.2 per cent dip in profits to $US1.2 billion, translating to $1.26 per share, three cents below expectations.

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