By KEN SWEET
2014-04-28 10:42 PM
NEW YORK (AP) -- Stocks were higher in early trading Monday as investors reacted to a potential $100 billion deal in the pharmaceutical industry. Bank stocks fell after Bank of America said it would have to suspend its stock buyback plan and a dividend increase.
KEEPING SCORE: The Standard & Poor's 500 index rose eight points, or 0.4 percent, to 1,871 in the first half-hour of trading. The Dow Jones industrial average rose 92 points, or 0.6 percent, to 16,453 and the Nasdaq composite increased 15 points, or 0.4 percent, to 4,090.
PFIZER COURTS ASTRAZENECA: The drug giant Pfizer renewed its push to buy British drug company AstraZeneca for $100 billion. If it goes ahead, the combination would be the latest big pharmaceutical deal to occur in recent weeks. AstraZeneca jumped $10.96, or 16 percent, to $79.60 on the news, and Pfizer was up 99 cents, or 3 percent, to $31.70.
BANK WORRIES: Bank of America sank 81 cents, or 5 percent, to $15.14 after the bank unexpectedly announced it would suspend its stock buyback program and its plan to raise its quarterly dividend. The bank said it discovered an error in how the bank calculates its capital ratio, a crucial measure of a bank's strength. The Federal Reserve asked the bank to put its buyback and dividend increase on hold until the error was fixed.
Other banks stocks fell on the news. Citigroup, JPMorgan Chase and Goldman Sachs each fell about 1 percent.
MORE PAIN FOR TECH STOCKS: Amazon continues to get pummeled after Thursday's disappointing earnings announcement. The retail giant fell $11.46, or 4 percent, to $292.29. Netflix fell for a fourth day, giving up $10.45, or 3 percent, to $311.95.
FED WATCH: The Federal Reserve will start a two-day policy meeting on Tuesday. The central bank is expected to announce a further pullback on its economic stimulus package. The central bank is expected to reduce its monthly bond purchases by another $10 billion to $45 billion.
UKRAINE: Investors are also watching the tensions between Ukraine and Russia. The White House announced additional sanctions against seven Russian officials and several companies in response to Russia's annexation of Crimea. In a separate development, the mayor of Ukraine's second-largest city was shot by unidentified gunmen.