Stocks: Pharma, earnings in the spotlight

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The pharmaceutical sector is stealing the show Tuesday.

Shares in Botox maker Allergan (AGN) surged nearly 20% in premarket trading after activist investor Bill Ackman and Valeant Pharmaceuticals (VRX) said they were planning a joint bid to buy the company. This is after Allergan gained 6% on Monday.

In Europe, GlaxoSmithKline (GLAXF) and Novartis (NVS) announced a multi-billion dollar deal that will see the firms swap some business units and combine others. Glaxo shares jumped in premarket trading while Novartis shares also rose before the opening bell.

AstraZeneca (AZN) shares slipped in premarket trading, losing their early gains in response to reports that Pfizer (PFE) had looked at buying the company for £60 billion ($100 billion). Some think an offer may yet come.

"Pfizer... has valid reasons to rekindle this [takeover] approach given the promising drug pipeline at AstraZeneca," said ETX Capital market strategist Ishaq Siddiqi.

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In the broader market, U.S. stock futures were slightly higher.

Wall Street has a big day of company results. Comcast (CMCSA) shares rose before the open after the cable provider reported that its quarterly net income and revenue increased in the first quarter from a year earlier. The CEO attributed the gains to the Sochi Olympics, which were broadcast via NBC.

Aerospace company Lockheed Martin (LMT) also reported a year-over-year gain in quarterly income.

AT&T (T) and Yum Brands (YUM) will release earnings after the close.

Shares in Netflix (NFLX) were higher after the company reported earnings that beat expectations. It also said it would increase its monthly fee for new customers in some countries later this quarter.

Shares in soccer club Manchester United (MANU) look set to dip after the company fired coach David Moyes after less than one season.

"The dismissal of Manchester United's manager is getting more attention than the global capital markets, where trillions of dollars are exchanging hands every day," wrote Marc Chandler, strategist for Brown Brothers Harriman, in a market report.

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On the economic front, existing home sales numbers from March will come out at 10 a.m. ET.

U.S. stocks drifted higher Monday. The Dow Jones industrial average, the S&P 500 and Nasdaq all ended the day with modest gains.

European markets were rising in midday trading.

Asian markets ended with mixed results, though the moves both up and down were relatively modest.

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