NEW YORK, (Reuters) – U.S. stocks scored their best week since November yesterday as a broker upgraded Merck & Co, saying its deal to buy a rival was shrewd, and Citigroup said it did not need any more government aid.
Merck gave the Dow its biggest boost after Sanford C. Bernstein upgraded the drug maker’s stock to “outperform,” saying its deal to buy Schering Plough Corp would add value at a decent price.
The S&P marked its third best week since World War II and was initially underpinned by comments from Citigroup’s Chairman Richard Parsons to Reuters late Thursday that the bank did not need any more government aid, sending its stock up more than 6 percent.
An index of bank stocks rose 37 percent this week after several top bank executives suggested the industry is stabilizing. The comments began to reverse several months of serious pessimism about the industry’s fate, lifting each of the major indexes to their best week since the end of November. The rally in drug stocks came after sharp declines in the sector in the wake of U.S. President Barack Obama’s budget, as investors bet it would choke profits.