(Updates to close)
* Pfizer works on next move in takeover bid for Astrazeneca
* Amazon.com leads Nasdaq’s loss
* Bank of America drops after suspending dividend increase, buyback plan
* Dow up 0.5 pct; S&P 500 up 0.3 pct; Nasdaq down 0.03 pct
By Caroline Valetkevitch
NEW YORK, April 28 (Reuters) - The S&P 500 ended higher on Monday after a volatile session, as gains in Apple and Pfizer helped offset another round of selling in some high-growth tech shares.
The Nasdaq ended slightly lower but rebounded late in the session from a fall of over 1 percent. Leading the Nasdaq down was Amazon.com, which extended Friday’s sharp decline a day after its earnings report.
A flurry of merger and acquisition activity in the pharmaceutical sector lifted shares. Shares of Pfizer Inc gained 4.2 percent to $32.04 after the U.S. drugmaker was said to be working on its next move in a potential $100 billion bid to take over Britain’s AstraZeneca Plc, after two earlier bids were rejected. Pfizer’s gains helped to lift the Dow.
“What we saw earlier was you had more rotation out of the high-beta momentum names, and I think a lot of those tech players rotated into Apple, which just had positive earnings and the buyback and dividend boost,” said Michael O‘Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
“Obviously, this whole M&A aspect of the pharmaceutical healthcare industry has people positively biased for the time being.”
The Dow Jones industrial average rose 87.28 points or 0.53 percent, to end at 16,448.74. The S&P 500 gained 6.03 points or 0.32 percent, to 1,869.43. The Nasdaq Composite dropped 1.161 points or 0.03 percent, to 4,074.401.
Apple’s stock jumped 3.9 percent to $594.09. The stock has gained 13.2 percent since the close on Wednesday, when Apple reported results after the bell.
Amazon.com ended down 2.4 percent at $296.58, while Facebook fell 2.7 percent to close at $56.14. High-growth stocks such as those have been battered in recent weeks as investors have pulled out of the tech and biotech space.
Bank of America shares tumbled 6.3 percent to $14.95 after the company said it will suspend a planned increase in its quarterly dividend as well as its latest stock-buyback program because it miscalculated a measure of the capital on its books.
The three major U.S. stock indexes lost ground during the session after Reuters, citing sources, reported that European Central Bank President Mario Draghi sees quantitative easing as still a ways away.
Chinese Internet stocks fell after China’s government ordered the removal of four U.S. television shows, including “The Big Bang Theory,” from video websites during the weekend. The U.S.-listed shares of Baidu slid 7.4 percent to $150.93.
In another M&A deal, Forest Laboratories Inc said it would buy Furiex Pharmaceuticals Inc for up to $1.46 billion, including milestone payments to add Furiex’s promising treatment for irritable bowel syndrome to Forest’s portfolio of gastrointestinal drugs.
Furiex Pharmaceuticals shares surged 28.6 percent to $103.05 while Forest Laboratories shares shed 0.4 percent to $89.50.
About 7.4 billion shares changed hands on U.S. exchanges, above the 6.5 billion average so far this month, according to data from BATS Global Markets.
Advancers outnumbered decliners on the New York Stock Exchange by a ratio of 8 to 7. On the Nasdaq, eight stocks fell for every five that rose. (Editing by Bernadette Baum and Jan Paschal)