Stocks Point Lower with Big News on Tap
A pair of solid reports on the U.S. economy sent stocks higher yesterday, as the Dow tacked on 92 points, or 0.75%, with similar percentage gains for the Nasdaq and the S&P 500.
The National Association of Realtors said more Americans signed contracts to buy previously-owned homes, and the Commerce Department reported more business placed orders for big, expensive items called durable goods last month.
Futures this Thursday morning are indicating a firmly lower open with Dow futures indicating a 73 point drop at the opening bell.
The release of the final reading on first-quarter GDP and weekly jobless claims in the U.S. didn't sway the markets much, but there's more excitement on tap later; the kick-off of the European Union Summit in Brussels, and the Supreme Court's ruling on health care.
The high court will rule on whether President Obama's health-care reform law is constitutional. The court’s nine justices will either give a thumbs up or down to all or parts of the president’s plan around 10:00 a.m. ET.
But the decision also affects individual investors in some obvious and not–so-obvious ways. In the run-up to the decision, many health-related stocks soared to all-time highs yesterday, including names like pharmaceutical company Alexion (NASDAQ:ALXN), biotech Biogen-Idec (NASDAQ:BIIB), and health-care services provider Davita (NYSE:DVA). Pharmaceutical giant Merck (NYSE:MRK) notched a four-year high yesterday, and in the first six months of the year, the health-care sector has surged more than 8% compared with a 5.9% gain for the broader S&P 500.
Health care makes up 18% of total U.S. economic output and 12% of the S&P 500.
You can now place an order for a Google (NASDAQ:GOOG) tablet. Google unveiled its Nexus 7 tablet computer at its annual I/O Developers Conference yesterday. Nexus 7 runs on the next version of the Android operating system called Jelly Bean and costs $199. It may not be an iPad killer, but may be -- at that price point -- a Kindle killer. Orders can be placed now on Google Plus for delivery next month.