NEW YORK - U.S. stocks are making small gains Friday as drug companies and consumer products makers trade higher. Valeant Pharmaceuticals is rising on reports it rejected a buyout offer, and beauty products retailer Ulta jumped after it reported strong first-quarter results and raised its projections for the year. Stocks are closing in on their best week since the beginning of March.
The Dow Jones industrial average rose 26 points, or 0.1 percent, to 17,854 as of 1:30 p.m. ET. The Standard & Poor's 500 index added five points, or 0.3 percent, to 2,096. The Nasdaq composite index picked up 23 points, or 0.5 percent, to 4,925. After big gains earlier in the week, stocks are on pace for their biggest weekly advance since the week that started on Feb. 29.
The Commerce Department said the U.S. economy was a bit stronger in the first quarter than it initially believed. The agency said the national gross domestic product grew 0.8 percent in the first three months of the year, above its original estimate of 0.5 percent. Experts think the economy will grow about 2 percent in the current quarter.
Specialty drug companies are trading higher, and that gave health care stocks a lift. Canadian drugmaker Valeant Pharmaceuticals rose after the Wall Street Journal said Japanese drug company Takeda and private equity firm TPG Capital approached Valeant earlier this year to discuss a potential sale. The report said Valeant rejected the overture. It cited anonymous sources. Valeant stock rose $2.06, or 7.7 percent, to $29.
Valeant stock has dropped almost 90 percent since mid-September as the company has faced multiple investigations and criticism over its drug prices, including its strategy of buying older drugs with limited competition and boosting their prices. Other companies that make costly drugs have also come under pressure, and they, too, traded a bit higher Friday. Endo International, the worst-performing stock on the S&P 500 this year, rose 58 cents, or 3.8 percent, to $15.80 and Mallinckrodt added $1.76, or 2.9 percent, to $63.24.
Vanda Pharmaceuticals climbed after the Food and Drug administration granted a new marketing approval for its schizophrenia drug Fanapt. The company said it could get additional marketing exclusivity for Fanapt as a result. That could bolster sales of the drug, which was originally approved in 2009. Vanda stock rose 73 cents, or 7.7 percent, to $10.22.
Consumer stocks also gained ground. Ulta Salon, Cosmetics and Fragrance posted strong first-quarter results and raised its estimates for the year. Its stock advanced $20.21, or 9.5 percent, to $233.90.
Machinery maker Terex dropped after Chinese heavy equipment maker Zoomlion abandoned its effort to buy the company. It said the sides had failed to reach a deal after months of talks. Zoomlion offered to buy Terex at the start of the year, after Terex accepted an offer from Finland's Konecranes. Terex backed out of that agreement and said it will sell its crane business to Konecranes instead. Terex stock lost $4.06, or 16.7 percent, to $20.27.
Scientific equipment maker Thermo Fisher said it will buy electron microscope maker FEI for $107.50 per share in cash, or about $4.2 billion. The deal comes about two months after Thermo Fisher paid $1.3 billion to buy Affymetrix, a company that makes equipment to analyze genetic codes. FEI stock climbed $12.92, or 13.7 percent, to match the agreed-on price of $107.50 and Thermo Fisher added 40 cents to $151.60.
Benchmark U.S. crude oil lost 26 cents to $49.22 a barrel in New York. Brent crude, which is used to price international oils, gave up 37 cents to $49.80 a barrel in London. Energy companies traded lower. Anadarko Petroleum lost $1.09, or 2.1 percent, to $51.19.
Federal Reserve Chair Janet Yellen is scheduled to discuss interest rates at a Harvard University appearance Friday afternoon, and investors will review her comments closely. The Fed has said it could raise interest rates again in June if economic conditions keep improving, but investors think the central bank is more likely to raise rates in July.
France's CAC 40 gave up 0.2 percent and the FTSE 100 in Britain lost 0.1 percent. Germany's DAX was little changed. Japan's benchmark Nikkei 225 index added 0.4 percent and South Korea's Kospi gained 0.6 percent. Hong Kong's Hang Seng climbed 0.9 percent.
Bond prices dipped and the yield on the 10-year U.S. Treasury note rose to 1.84 percent from 1.83 percent. The dollar rose to 109.87 yen from 109.72 yen. The euro dipped to $1.1133 from $1.1191.