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U.S. stocks traded mostly higher toward the end of trading, with the S&P 500 gaining around 0.5% on Tuesday.

The Dow traded up 0.05% to 44,759.66 while the NASDAQ rose 0.59% to 19,166.93. The S&P 500 also rose, gaining, 0.47% to 6,015.37.

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Leading and Lagging Sectors

Utilities shares jumped by 1.1% on Tuesday.

In trading on Tuesday, materials shares fell by 0.7%.

Top Headline

Dick's Sporting Goods Inc. reported upbeat earnings for its third quarter.

The company posted third-quarter adjusted earnings per share of $2.75, beating the street view of $2.68. Quarterly sales of $3.06 billion (+0.5%) outpaced the analyst consensus of $3.03 billion.

Dick's Sporting now expects FY24 earnings per share to be between $13.65 and $13.95, up from the previous forecast of $13.55 to $13.90, compared to the consensus estimate of $13.88. The company sees FY24 net sales of $13.2 billion to $13.3 billion versus the $13.25 billion consensus and the prior view of $13.1 billion to 13.2 billion

Equities Trading UP

• Poseida Therapeutics, Inc. shares shot up 226% to $9.32 after the company announced it will be acquired by Roche in a $1.5 billion deal, with stockholders receiving up to $13 per share in cash.
• Shares of Hesai Group got a boost, surging 64% to $7.78 after the company reported better-than-expected third-quarter sales results.
• Embecta Corp. shares were also up, gaining 33% to $19.13 after the company reported better-than-expected fourth-quarter financial results and issued FY25 adjusted EPS guidance above estimates.

Equities Trading DOWN

• Alector, Inc. shares dropped 35% to $2.5650 after the company announced that the INVOKE-2 Phase 2 clinical trial evaluating the safety and efficacy of AL002 in individuals with early Alzheimer’s disease failed to meet its primary endpoint.
• Shares of Leslie’s, Inc. were down 33% to $2.37 after the company reported worse-than-expected quarterly adjusted EPS and sales.
• Kohl’s Corporation was down, falling 17% to $15.20 after the company reported worse-than-expected third-quarter results, cut its FY24 EPS guidance, and projected a net sales decrease of 7%-8%.

Commodities

In commodity news, oil traded down 0.7% to $68.49 while gold traded up 0.3% at $2,626.70.

Silver traded up 0.9% to $30.510 on Tuesday, while copper fell 1% to $4.1160.

Euro zone

European shares closed lower today. The eurozone's STOXX 600 slipped 0.57%, Germany's DAX fell 0.56% and France's CAC 40 slipped 0.87%. Spain's IBEX 35 Index fell 0.80%, while London's FTSE 100 fell 0.40%.

Asia Pacific Markets

Asian markets closed mostly lower on Tuesday, with Japan's Nikkei 225 falling 0.87%, Hong Kong's Hang Seng Index gaining 0.04%, China's Shanghai Composite Index falling 0.12% and India's BSE Sensex falling 0.13%.

Hong Kong’s trade deficit widened to $31 billion in October from $25.8 billion in the year-ago month.

Economics

• The FHFA house price index rose by 0.7% from the previous month for September.
• The S&P CoreLogic Case-Shiller home price index rose 4.6% year-over-year in September versus a 5.2% increase in August.
• U.S. building permits declined by 0.4% to an annual rate of 1.419 million in October.
• Sales of new single-family homes in the U.S. dipped by 17.3% to an annualized rate of 610,000 in October.

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Shares of Poseida Therapeutics Inc more than tripled this morning after Roche Holding (SWX: ROG) said it will buy the clinical-stage biopharmaceutical company for about $1.5 billion.

Roche’s offer values each share of Poseida Therapeutics at $9.0 that translates to a more than 200% premium on their previous close.

Poseida shareholders will also get a “non-tradeable contingent value right (CVR) to receive up to an aggregate of $4.0 per share in cash upon achievement of specific milestones” as part of the company’s agreement with Roche.

Why did Roche value Poseida stock at a premium

Poseida Therapeutics is known for its allogenic CAR-T therapies that promise “off-the-shelf” treatments that are readily available for patients with certain types of cancers.

Roche has been working with this California based company on evaluating P-BCMA-ALL01 as a potential treatment for multiple myeloma.

That study produced positive data last month.

Spending $1.5 billion in cash on Poseida Therapeutics will help expand its footprint in cancer treatments.

Roche’s “global capabilities in late-stage development and commercialisation will enable patients worldwide to benefit from the transformative potential of allo CAR-T” as well – as per Kristin Yarema – the chief executive of Poseida Therapeutics.

Heading into Tuesday, Wall Street had a consensus “buy” rating on Poseida stock.

Roche-Poseida deal to close in early 2025

Roche expects the PSTX transaction to complete in the first quarter of 2025 as long as it satisfies the customary closing conditions, including regulatory and shareholders’ approval.

The merger will improve clinical outcomes and expand access to TSCM-rich CAR-T therapies.

“This acquisition builds on our joint progress to catalyse the development of potentially first and best-in-class therapies in oncology, immunology, and neurology,” as per Levi Garraway – the chief medical officer of Roche Holding.

The news arrives more than a month after Roche reported a better-than-expected 9.0% increase in quarterly sales and forecast a high single-digit percentage increase in full-year adjusted per-share earnings.

Roche stock currently pays a healthy dividend yield of 3.81% that makes up for another good reason to have it in your portfolio.

Is Roche stock a buy after PSTX deal?

A 13% decline in Roche stock since early September may be a buying opportunity considering analysts at the Bank of America Securities see upside in it to CHF 340.

Their price target indicates potential for a more than 35% gain from current levels.

The investment firm expects a meaningful recovery in Roche’s per-share earnings in the coming year.

It’s bullish on Roche shares also because key products like Vabysmo and Xolair could deliver a significantly boost to the company’s pharmaceutical margins in 2025.

Additionally, three assets in Roche’s pipeline could eventually add over $5.0 billion to its annual sales, BofA told clients in a recent research note.