After receiving news of lower-than-expected jobless claims, higher-than-expected job growth, and interest-rate cuts by the European Central Bank to 0.5%, the U.S. markets rallied this past week. The Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) managed to gain 261 points, or 1.77%, and now sits just a few points below the 15,000 milestone at 14,973. The other major indexes actually performed better, as the S&P 500 (INDEXSP:.INX) rose 2.03% and broke the 1,600 barrier, as it now rests at 1,614. The NASDAQ Composite (INDEXNASDAQ:.IXIC) increased by 3.03%, or 99 points, and sits at 3,378.
Before we hit the Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) losers, the index’s big winner of the week was Microsoft Corporation (NASDAQ:MSFT). On Tuesday, shares rose 1.5% after an analyst at Bernstein Research released a report indicating that investors and other analysts may have undervalued Microsoft Corporation (NASDAQ:MSFT)’s cloud computing business. The company’s executive recent announced that the unit has produced more than $1 billion in revenue, a number the Bernstein analyst says is way over what most have been estimating. This means that a number of ratings and price targets are probably lower than where they should be.
The big losers
Both of the Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI)’s big pharmaceutical stocks fell this week, and Merck & Co., Inc. (NYSE:MRK) became the biggest Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) loser after shares fell 4.6% over the past five trading days, while Pfizer Inc. (NYSE:PFE) fell 3.75%. Both companies announced earnings during the week, and neither company gave investors the results they wanted to see for the first quarter of the year.
While Merck & Co., Inc. (NYSE:MRK) did beat expectations on revenue, the company missed on earnings. But what really sent investors running was that the company revised its full-year earnings forecast lower by 15%. Shares fell 2.78% on Wednesday alone after earnings and the revised forecast were announced.
I mentioned last week, when shares, of Pfizer Inc. (NYSE:PFE) fell 3.12% that Bristol Myers Squibb Co. (NYSE:BMY) had reported poor quarterly results, and that was causing shares of other drug manufacturers to decline. Well, this week, the same thing happened. After Pfizer announced less-than-appealing results on Tuesday, we saw the whole industry head lower. Pfizer reported that revenue fell by 9%, while adjusted income dropped 10% during the quarter. But the main reason Merck tanked slightly more the Pfizer Inc. (NYSE:PFE) this week was that Merck & Co., Inc. (NYSE:MRK) lowered guidance and Pfizer didn’t.