US stocks retreat on mixed earnings; Shire surges

A drop in US stockpiles and hopes for a Russia-OPEC output cap deal have helped send oil prices soaring

New York (AFP) – Wall Street stocks retreated Thursday following mixed earnings reports, while shares of Irish drugmaker Shire rocketed higher as it faced a potential bidding war.

US stock markets, which began the week on a strong note, finished lower on worries about Apple following a weak outlook from supplier Taiwan Semiconductor Manufacturing. Apple, the biggest company by market capitalization, fell 2.8 percent. 

US stocks also were pressured by lackluster results from Dow member-Procter & Gamble that underscored the impact of cutthroat pricing for consumer staples as Amazon disrupts the retail sector. Other large consumer stocks, including Colgate-Palmolive and Clorox, also fell.

Analysts also cited the rise in the yield of the 10-year US Treasury bond as a concern, along with the lofty state of the equity market after gains earlier in the week.

“Many look at the market overall and suggest maybe the market is overbought again and it needs to take a breather,” said Quincy Krosby, chief market strategist at Prudential Annuities.

All three major US stock indices retreated, with the broad-based S&P 500 shedding 0.6 percent.

European markets were mixed, while Asian bourses enjoyed another day of gains as the region’s energy firms rallied.

Shire, which is based in Ireland and listed on the London stock market, saw its share price surge more than 10 percent following reports, later confirmed, that Japan’s Takeda Pharmaceuticals was making a takeover move on Shire.

The company gave up much of those gains after Takeda said it had made a takeover bid worth £42 billion ($60 billion), but that Shire had rejected the offer. 

But Shire shares shot up once again when Botox maker Allergan said it was considering making an offer as well, closing the day 5.9 percent higher.

Allergan shares fell 4.2 percent in New York.

“We might see a bidding war on our hands as Allergan are allegedly interested in bidding for Shire,” noted CMC Markets analyst David Madden.

Oil futures were mixed, with the US benchmark West Texas Intermedia dipping and British contract Brent futures rising ahead of a closely-watched meeting of major producers in Saudi Arabia. 

– Key figures around 2100 GMT – 

New York – Dow: DOWN 0.3 percent at 24,664.89 (close)

New York – S&P 500: DOWN 0.6 percent at 2,693.13 (close)

New York – Nasdaq: DOWN 0.8 percent at 7,238.06 (close)

London – FTSE 100: UP 0.2 percent at 7,328.92 (close) 

Frankfurt – DAX 30: DOWN 0.2 percent at 12,567.42 (close)

Paris – CAC 40: UP 0.2 percent at 5,391.64 (close)

EURO STOXX 50: DOWN 0.1 percent at 3,486.60 (close)

Tokyo – Nikkei 225: UP 0.2 percent at 22,191.18 (close)

Hong Kong – Hang Seng: UP 1.4 percent at 30,708.44 (close)

Shanghai – Composite: UP 0.8 percent at 3,117.38 (close)

Euro/dollar: DOWN at $1.2344 from $1.2374 at 2100 GMT

Dollar/yen: UP at 107.37 yen from 107.23

Pound/dollar: UP at $1.4082 from $1.4203

Oil – Brent North Sea: UP 30 cents at $73.78 per barrel

Oil – West Texas Intermediate: DOWN 18 cents at $68.29 per barrel