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NASDAQ Rallies on Biotech, Security Booms


Today's financial recap and tomorrow's financial outlook.

The S&P 500 finished fractionally lower following yesterday's impressive rally.

Asian markets rebounded as traders followed through from yesterday's rally in US and European markets along with government stimulus. China's Shanghai Composite and Hong Kong's Hang Seng Index both rose sharply.

German economic sentiment fell to 53.3 in April, missing the 55.3 consensus. However, European markets finished higher today. The German 10-year bund yield rose 2.6 bps to 0.101% after nearly going negative on Friday. Bill Gross stated on CNBC and Bloomberg that German bunds are "the short of a lifetime".

Fortinet (FTNT) shares rallied over 10% today on its significantly better-than-expected earnings report. The report got investors optimistic about the overall security sector, with FireEye (FEYE), Cyberark (CYBR), and Palo Alto Networkds (PANW) all staging impressive rallies. The Purefunds Cyber Security ETF (HACK) was up 2.4%.

Teva Pharmaceuticals (TEVA) offered $40 billion in cash and stock for Mylan NV (MYL). The combined company would have annual revenues of bout $30 billion. Mylan previously stated that it is committed to remaining an independent company, and sought to acquire Perrigo for $30 billion earlier in April. Shares of Teva finished up 1.4%, while shares of Mylan rose 8.9%.

Gilead Sciences (GILD) and Vertex Pharmaceuticals (VRTX) shares rallied as Bernstein analyst Geoffrey Porges stated that Gilead should acquire Vertex for an estimated $45 billion, roughly a 50% premium. Porges stated Vertex has the best profile to complement Gilead's portfolio and fulfill its need for $5 to $7 billion in incremental revenue by 2020. Gilead finished up 4.5%, while Vertex finished up 5.3%.

The whirlwind of biotech M&A activity pushed the sector up sharply, with the NASDAQ Biotechnology ETF (IBB) rising 1.8%, making it one of the best performings sectors.

The biotech strength, along with the cyber security rally, pushed the NASDAQ up 0.4%. By comparison, the S&P 500, Dow Jones Industrial Average, and Russell 2000 were all down on the day.

Wednesday's Financial Outlook

Economic announcements for Wednesday will include MBA Mortgage Applications, Existing Home Sales and crude oil inventories.

There are no major economic announcements taking place overseas.

Tomorrow's earnings reports will feature some big names.

Before the open we'll be hearing from Boeing (BA), Coca-Cola (KO), DR Horton (DHI), EMC (EMC), and McDonald's (MCD).

After the close, Ameriprise Financial (AMP), AT&T (T), eBay (EBAY), Facebook (FB), Las Vegas Sands (LVS), Qualcomm (QCOM), and Texas Instruments (TXN) will report.
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