US stocks tick higher as health care companies rise

NEW YORK – U.S. stocks are edging higher Tuesday with health care companies leading the way. Banks are rising as central banks in the U.S. and Japan meet to discuss potential changes in interest rates and stimulus measures. Phone company stocks, which do better when interest rates are lower, lagged the market.

KEEPING SCORE: The Dow Jones industrial average gained 43 points, or 0.2 per cent, to 18,163 as of 12:15 p.m. Eastern time. The Standard & Poor’s 500 index added 3 points, or 0.2 per cent, to 2,142. The Nasdaq composite picked up 8 points, or 0.2 per cent, to 5,243.

HEALTH CARE HIGHER: Gilead Sciences gained $2.38, or 3 per cent, to $81.37 after the hepatitis C drugmaker completed a $5 billion debt offering. Gilead said it may use the cash to make a deal, and Jefferies & Co. analyst Brian Abrahams said he thinks the company is getting close to at least one acquisition. Elsewhere, Merck rose 93 cents, or 1.5 per cent, to $62.26.

FED FACTOR: The Federal Reserve and Bank of Japan are both at the start of two-day meetings. Investors don’t expect the Fed to raise interest rates, but they will keep an eye on its plans for the rest of the year. Meanwhile, the Bank of Japan is expected to take new steps to boost the ailing Japanese economy. That could include an increase in its stimulus program or a further cut in the deposit rate as a way to encourage banks to lend money.

ASCENA PLUNGES: Ascena Retail Group, the parent of Ann Taylor, Lane Bryant and Dress Barn, dropped to a six-year low. The company reported weak quarterly results and gave a forecast that didn’t live up to investor expectations. The company bought Ann Taylor a year ago and also struggled with discounts from competitors and shaky demand. Its stock lost $2.29, or 28.2 per cent, to $5.83.

ANOTHER ALLERGAN DEAL: Allergan, the maker of Botox, announced yet another acquisition as it agreed to buy Tobira Therapeutics. Tobira is studying drugs that treat symptoms of non-alcoholic steatohepatitis, a disease that triggers inflammation that can lead to cirrhosis, cancer and liver failure.

Tobira stock traded over $100 in early 2014 but has tumbled since then. In July its shares fell after Tobira reported mixed results from a mid-stage clinical study. The stock finished at $4.74 on Monday, but Allergan agreed to pay $28.35 per share upfront, and could pay another $49.84 if Tobira’s drugs succeed in clinical testing, win regulatory approved, and meet sales targets.

Tobira shares skyrocketed to $38.28 and Allergan fell $5.92, or 2.4 per cent, to $239.37.

HOME NOT SO SWEET: The Commerce Department said the pace of home construction slowed down in August as fewer homes were built in the South. Monthly housing figures can be volatile and housing starts continued to grow this year, but the result hurt shares of homebuilders. PulteGroup gave up 56 cents, or 2.8 per cent, to $19.31 and Beazer Homes fell 11 cents, or 1 per cent, to $11.03. Lennar, which reported strong quarterly results, shed $1.59, or 3.5 per cent, to $43.50.

GET A ROOM: Hotel chains Marriott and Starwood climbed after regulators in China approved the $14.41 billion deal that will bring them together as the world’s largest hotel chain. Marriott, which is buying Starwood, said it expects to complete the deal Friday. Its stock added $1.86, or 2.7 per cent, to $70.20 and Starwood rose $2.02, or 2.7 per cent, to $77.11.

CRUISING ALONG: Royal Caribbean Cruises added $2.38, or 3.6 per cent, to $67.86 after the company raised its quarterly dividend to 48 cents from 37.5 cents.

SEAWORLD SINKS: Water park operator SeaWorld Entertainment said it will cut its dividend in half in October and then stop paying dividends to shareholders altogether. The company said it will save its cash so it can buy back more stock. SeaWorld has faced falling attendance and revenue as some consumers have grown reluctant to support its shows featuring killer whales and dolphins. Earlier this year SeaWorld said it will stop breeding killer whales and will stop using them in shows. Its stock gave up 56 cents, or 4.4 per cent, to $12.13.

BONDS AND CURRENCIES: Bond prices rose. The yield on the 10-year U.S. Treasury note fell to 1.67 per cent from 1.71 per cent. The dollar fell to 101.70 yen from 101.81 yen. The euro slipped to $1.1172 from $1.1178.

ENERGY: Benchmark U.S. crude rose 43 cents, or 1 per cent, to $43.73 a barrel in New York. Brent crude, used to price international oils, slipped 1 cent to $45.94 a barrel in London.

OVERSEAS: France’s CAC 40 slipped 0.1 per cent while Germany’s DAX rose 0.2 per cent. In Britain, the FTSE 100 index was 0.3 per cent higher. Tokyo’s benchmark Nikkei 225 closed down 0.2 per cent and South Korea’s Kospi added 0.5 per cent. The Hang Seng in Hong Kong dipped 0.1 per cent.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at http://bigstory.ap.org/journalist/marley-jay