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S&P 500 Flirts With All-Time Highs, Biotech Rises on ISIS Pharmaceuticals Deal


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

The S&P 500 hit a morning high of 2120.95, coming within five points of the 2125.92 all-time high, but settled down to finish with a modest 0.3% gain at 2114.49.

The Dow Jones, Nasdaq, and Russell 2000 finished up as well.

Biotech stood out again today on good news from a high-profile momentum name.

ISIS Pharmaceuticals (ISIS) rose 2.4% after announcing a deal with Bayer Healthcare to bring its anticoagulant ISIS-FXIRx to market. ISIS will receive $100 million up front from Bayer, with another possible $55 million milestone payment. After ISIS finishes its clinical activities, Bayer will take over global development and commercialization.

The S&P SPDR Biotech ETF (XBI) rallied 1.4%.

Rumors that Monsanto (MON) was in talks to acquire Syngenta sent shares of both companies up this morning. However, Syngenta refused to comment on the rumors and both stocks finished lower.

Tesla (TSLA) finished up 2.0% after the company said it will begin a certified used vehicle program, offering its Model S at discounted prices. The cars are pre-owned vehicles from Tesla owners looking to opt for new models. While Tesla will release the Model 3 at a price tag of around $35k in 2017, the used Model S program could allow greater consumer access to Tesla vehicles before then.

In a weekend interview with Wall Street Week, billionaire investor Carl Icahn stated that he believes Apple (AAPL) is still heavily undervalued. Calling it a company that comes along once every 50 years, Icahn said he hasn't sold a single share since he first bought it, and that he continues to buy more whenever it drops. According the Icahn, the earnings multiples Apple has right now aren't aligned with its fundamentals, and the company has the potential for a $1 trillion market cap. Following an initial gain, Apple shares fell 0.2% today.

US Factory orders rose 2.1% in March, beating the 2.0% expected by economists. And the ISM New York IUndex was 58.1 in April, up from 50.0 in March.

FOMC Voter Charles Evans said today that the Fed should delay raising rates until early 2016. Evans said he needs evidence that the Q1 slowdown was "transitory" and that inflation won't reach 2% until 2018.

European bond yields were higher across the board, with the 10-year German bund up 8.0 bps to 0.453%. The 10-year bund nearly went negative in mid-April.

The Financial Times reported that the IMF was taking a hard line with Greece. According to officials, IMF data showed that Greece is on track to run a budget deficit of as much as 1.5% of GDP this year, while under existing bailout agreements, Athens is supposed to run a 3% surplus this year. With Greece off track with its bailout program, the IMF may hold back its half of a 7.2 billion euro bailout aid for Greece.

Tuesday's Financial Outlook

For US economic news, we have trade balance for March, Markit US Composite PMI, Markit US Services PMI, IBD/TIPP Economic Optimism, and ISM Non-Manfacturing Composite for April.

Overseas, we will receive the Bank of Australia's rate decision, the European Comission'se economic forecasts, New Zealand employment data, Australian retail sales, and HSBC China Composite and Services PMIs.

For earnings reports, before the open we have Archers-Daniels Midland (ADM), DirecTV (DTV), Discovery (DISCA), Estee Lauder (EL), Kellogg (K), Office Depot (ODP), and Walt Disney (DIS).

After the close we have: Agrium (AGU), Allstate (ALL), CenturyLink (CENT), Devon Energy (DVN), Mylan Labs (MYL), and Sun Life (SLF).
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