BloggingStocks

Town Bankruptcy Bad Sign for Other Towns
The mortgage crisis, the limping economy and a recent bankruptcy filing by Vallejo - the first municipality to do so since Desert Hot Springs, Calif., in 2001 - have hobbled this town of 120,000. Vallejo's closely watched Chapter 9 bankruptcy filing in federal court in Sacramento may be a warning sign of dangers that could befall other cash-strapped municipalities.
Economy hobbles Calif. town - USATODAY.com

10 Funds Suffering the Biggest Exoduses
Which mutual funds are seeing the biggest outflows in 2008? They include some very well-known popular funds like Fidelity Low-Priced Stock, American Funds Investment Company of America and the Legg Mason Value funds.
The 10 Funds Suffering the Biggest Exoduses

Gas-Saving Deals That Rarely Pay Off
Beware of products that claim to make cars more fuel-efficient, ad offering gas rewards and discounts, gas rewards credit cards and auctions of gas vouchers/coupons. Read the fine print first.
4 Gas-Saving Deals That Rarely Pay Off - SmartMoney.com

The Smartest Advice I Ever Got
From Bill Miller to Derek Jeter: 40 great minds share the best money lessons they ever learned.
The smartest advice I ever got - From Mom and Dad (1) - CNNMoney.com

Help on the Horizon for Soaring College Costs?
With the credit crunch hitting student loans and costs soaring, paying for college is daunting. But there are a few rays of hope.
Help on the horizon for college costs? - Bankrate.com

Independent Coffee Shops Speak Up
As Starbucks' expansion loses steam, independent coffee shops reveal the subtle ways they compete with the coffee powerhouse.
As Starbucks Scales Back, Indies Share Strategies - BusinessWeek

Blue-Collar Billionaires
Thanks to telecom deregulation and the hustle he displayed in the late 1980s buying up, then selling, long-distance phone time, Illinois native Kenny Troutt went from construction worker to billionaire. Meet the construction worker, fisherman and gas station attendant who earned astonishing fortunes.
Blue-Collar Billionaires - Forbes.com
In Pictures - Blue-Collar Billionaires

5 Places to Find Good Toys Cheap
Here are some affordable ways to make sure your little one's toy chest is full, regardless of how the economy fares.
5 Places to Find Good Toys Cheap | MainStreet

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Before the bell: AAPL, AXP, SNDK, TXN, DD, WB, CAT, XMSR, HAL ...

Melly Alazraki — 2008-07-22T08:04:00+00:00

Filed under: Before the bell, Earnings reports, Yahoo! (YHOO), Apple Inc (AAPL), Ford Motor (F), General Motors (GM), XM Satellite Radio (XMSR), Market matters, Caterpillar (CAT), American Express (AXP), H and R Block (HRB), Federal Natl Mtge (FNM), duPont(E.I.)deNemours (DD), United Parcel'B' (UPS), Wachovia Corp (WB), Washington Mutual (WM), Merck and Co (MRK), Texas Instruments (TXN), SanDisk Corp (SNDK)

Stocks futures are lower Tuesday morning, indicating U.S. stock markets will start on a down note following weak outlooks and disappointing financial results from several companies including Apple and American Express. With oil steady and no economic data out today, Wall Street will focus on earnings.

Apple Inc. (NASDAQ: AAPL) reported after the close Monday a record quarter that beat analyst estimates, posting a 31% surge in earnings. Mac and iPod sales satisfied investors, while iPhone sales were somewhat on the lighter side. What concerned investors most was the very weak guidance Apple gave, which was weak even by Apple's standards of lowballing. Other issues included margin squeeze and Jobs health. Apple shares were 10% lower in Frankfurt and premarket trading.

American Express (NYSE: AXP), said late Monday its second-quarter results fell 38% due to the weakening economy. The company, which missed projections, caters to the more affluent who have good credit, and yet even this company felt the pains from the slowing economy. AmEx earned 56 cents per share compared to estimates of 83 cents per share. The company's stock tumbled AXP shares are down over 12% in premarket trading.

Also reporting Monday after the close were Merck & Co., Inc. (NYSE: MRK), Texas Instruments (NYSE: TXN) and SanDisk (NASDAQ: SNDK). MRK shares are down over 6.6% in premarket trading as the company said it would stop give guidance of results. TXN shares are also declining over 10.5% in premarket trading after it gave a disappointing forecast. SNDK shares are plunging over 16% in premarket trading after it swung to a Q2 loss, missing analyst estimates.

This morning we'll have another wave of earnings, and already started were DuPont and Wachovia.

DuPont Co. (NYSE: DD) said Tuesday agriculture sales and emerging markets helped fuel a rise in second-quarter profit to $1.08 billion, or $1.18 per share. Net sales rose to $8.83 billion. This beat expectations of $1.07 per share on revenue of $8.47 billion. While DuPont raised its 2008 outlook slightly, it expects earnings in the second half of this year to decline from a year earlier. DD shares are actually nearly 2% higher in premarket trading.

Meanwhile, Wachovia Corp (NYSE: WB) shares are down over 12% in premarket trading after the bank posted an $8.86 billion second-quarter loss and slashed its dividend for a second time this year. Wachovia's results missed analyst estimates.

Also, Caterpillar Inc (NYSE: CAT) said on Tuesday quarterly earnings rose 34% due to strong growth in emerging economies that offset weakness in North America, Western Europe and Japan. Sales rose 20%. The company handily topped Street estimates.

XM Satellite Radio Holdings Inc. (NASDAQ: XMSR) said its second-quarter loss narrowed. Earnings per share came in at 38 cents, better than the loss of 42 cents a share forecast by analysts polled by FactSet Research. Revenue climbed 15% as the satellite radio company posted a 17% increase in subscribers.

Halliburton Co. (NYSE: HAL) said net income dropped 67% after the sale of the company's stake in engineering unit KBR inflated 2007 earnings, ex-items, profit rose to 68 cents from 63 cents, matching the average of 22 analyst estimates compiled by Bloomberg.

Reporting after the close are after the close, Yahoo (NASDAQ: YHOO), United Parcel Service (NYSE: UPS) and Washington Mutual (NYSE: WM).

In non-earnings news:

Bush Prods Congress, as Financers Are Inspected - Treasury Secretary Henry M. Paulson Jr. said examiners are inspecting the books of Fannie Mae and Freddie Mac.
GM, utilities team up on electric cars - Partnership aims to tackle issues that will crop up when electric vehicles are rolled out.
H&R Block names McDonald's executive CEO
Ford to Make Broader Bet on Small Cars - After two decades focused on trucks, the company is about to drastically shift focus to building smaller cars.

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Too many eggs in the basket?

Todd Harrison — 2008-07-21T18:09:00+00:00

Filed under: Bad news, Products and services, Merck and Co (MRK), Economic data

Minyanville Professor David Miller dares to share the kind of keen insight and actionable information you won't find in any prospectus. For more original thought, visit www.minyanville.com.

Professor Miller,
I just saw news of Merck & Co., Inc. (NYSE: MRK)'s and S chering Plough Corporation (NYSE: SGP)'s Vytorin not meeting their goal of heart study. Approximately 40% of Schering Plough's profit comes from this joint venture. Do you think pharmaceutical companies put too many eggs in one basket? Do they have a choice?

Minyan T.

MT,

They do have a choice, but the decision is to focus only on blockbuster drugs - which are a dying breed in this age of increased focus on personalized medicine. But the study is not as big of a disaster as some are saying. The main goal of aortic thickening is not as important to this drug as reductions in atherosclerotic events, which was positive in favor of Vytorin.

Basically, MRK/SGP tried to extend the market for Vytorin by this study in a place few thought it would work. They overextended, which is the bad news. The good news is the study confirmed the drug works to reduce cardiac events related to fat in the arteries, which is what the drug is primarily prescribed for.

-Professor Miller

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Merck shares plummet 10%: earnings topped estimates, but no guidance

Melly Alazraki — 2008-07-21T18:05:00+00:00

Filed under: Earnings reports, Merck and Co (MRK)

Merck & Co., Inc. (NYSE: MRK) reported earnings per share of 82 cents, but excluding restructuring charges, the pharmaceutical company said it earned 86 cents per share, topping analyst estimates of 83 cents per share. Revenue came in at $6.1 billion for the quarter, a decrease of 1% from the second quarter of 2007, but in line with estimates. Yet the stock is plummeting 10% in after-hours trading, after closing at $35.33, down 6.24% during the session.

This shouldn't really be surprising, Merck is not providing 2008 equity income guidance and any long-term financial performance guidance while it is assessing the effects on the Vytorin/Zetia drugs after the failed study result. It also lowered sales guidance for Gardasil, which may not be surprising. But what is surprising is that the drugmaker also lowered sales estimates for its allergy-fighting Singulair.

If investors thought Merck has its work cut out for it, this earnings report underscored the issue even more. Already punished 35% year-to-date, Merck shares will likely continue to be soft until a clear outlook can be seen. Right now, with so many open question and even the company not willing to make educated predictions, many will likely stay away.

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Closing Bell: Bank earnings and major biotech fail to win over oil and profit taking

Jon Ogg — 2008-07-21T16:14:00+00:00

Filed under: Yahoo! (YHOO), Bank of America (BAC), Whole Foods Market (WFMI), Merck and Co (MRK), Genentech Inc (DNA)

Today was light on the economic front as far as impact numbers. The June leading economic indicators were down at -0.1%, and the May gain of +0.1% was revised lower to -0.2%. This shows little argument for a strengthening economy. Oil showed how it can still rise as tropical storm Dolly is in the Gulf of Mexico and no deal was reached with Iran, with prices back above $131.00 per barrel. Today was looking like a gain at the start, but the market slid as the day went on.

Below are today's unofficial closing bell index levels:

DJIA 11.467.67 (-28.90)
S&P 500 1259.72 (-0.96)
NASDAQ 2279.69 (-3.09)
10 YR T-NOTE 4.067% (-0.014%)
52-WEEK LOWS
Top Analyst Calls

Bank of America Corp. (NYSE: BAC) showed a more than 4.6% gain at $28.80 in today's final minutes after the earnings report this morning came in far above lowered expectations. This stock is now up over 50% in a few days.

Genentech Inc. (NYSE: DNA) was the biotech winner today as its former parent and almost 56% holder offered to acquire the rest of the company for $89.00 per share in cash. Shares were up 14% at $93.50 as many feel the real offer for the company will have to come in at $100.00 or higher.

Merck & Co., Inc. (NYSE: MRK) shares were down almost 6% at $34.45 in today's final minutes. The company released mixed to cautious data on its Vytorin and delayed earnings until after the close.

Whole Foods Market Inc. (NASDAQ: WFMI) shares were up over 4% at $22.30 in today's final minutes after its stock was upgraded at Morgan Stanley early this morning.

Yahoo! Inc. (NASDAQ: YHOO) capitulated and allowed Carl Icahn and two other Icahn-appointed members to stand for election in a deal which will end the proxy fight. As this means no deal is on the table now, shares were down 3% at $21.77 in today's final minutes.

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Ultra-safe places to stash your cash, car renters watch out & God wants me to be rich - Today in Money 7/21

Allan Halprin — 2008-07-21T08:37:00+00:00

Filed under: Yahoo! (YHOO), Time Warner (TWX), Money and Finance Today, Bank of America (BAC), Merck and Co (MRK), Genentech Inc (DNA), Hasbro Inc (HAS)

In the News:

· Bank of America Posts 4th Straight Quarterly Profit Decline

· Yahoo Settles With Icahn to Avert Battle; Icahn Appointed to Yahoo's Board

· Treasury Secretary Paulson Braces People for More Tough Times Ahead

· Roche Offers $44 Billion for Rest of Genetech

· Has Oil Prices Finally Peaked? Drops 13% Last Week

· Merck, Schering-Plough Delay Earnings Report to Await Vytorin Update

· 'Indiana Jones' & 'Star Wars' Toys Help Hasbro Top Street's Forecasts

· Warner Brothers Batman Movie Snaps Hollywood's Slump With Record Weekend

· Gloomy Days Ahead for Retailers; New Wave of Bankruptcies May Be Forthcoming

Ultra-Safe Places to Stash Your Cash
The bank safety scare of the past two weeks has sent depositors scrambling to check the rules for FDIC insurance of banking deposits, but many people are left wondering where else they can put their money so that they can sleep well at night.
Ultra-Safe Places to Stash Your Cash - TheStreet.com

FDIC: What You Need to Know
ow safe is your money if your bank fails? Suze Orman tells you what FDIC will - and won't - protect in the event your bank goes under.
Suze Orman: What You Need to Know About FDIC Insurance - CNBC.com
Also: Most Banks are Safe; So Is FDIC

The Last Media Tycoon
Seven years after the death of legendary Washington Post publisher Katharine Graham, her 42-year-old granddaughter has taken over control of the paper and is shaking up the newsroom. See how she plans to save the family's flagship brand and -- she hopes -- reinvent the industry.
Washington Post Publisher Weymouth - Portfolio.com

My Credit? Let's Talk About My Sex Life Instead
Consumers are more likely to talk about sex and the death of a loved one than they are to broach a conversation about their credit. But it might be because they just don't understand all of it -- the credit part, that is.
My credit? Let's talk about my sex life instead - MarketWatch

Car Renters: Watch Out for $8 Gas
These days, the dreaded refueling charge is nastier than ever. Here's how to avoid it.
Some Car Renters Socked With $8 a Gallon - SmartMoney.com

God Wants Me to Be Rich
Joel Osteen preaches the virtues of prosperity -- for himself as well as his congregation. A look at the man who may well be one of the biggest beneficiaries of the slumping economy.
Megachurch Preacher Joel Osteen - Executive Articles - Portfolio.com

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Before the bell: BAC, DNA, YHOO, AAPL, MRK, AXP, TWX, HAS ...

Melly Alazraki — 2008-07-21T08:05:00+00:00

Filed under: Before the bell, Earnings reports, Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Apple Inc (AAPL), Time Warner (TWX), Market matters, American Express (AXP), Bank of America (BAC), Merck and Co (MRK), Genentech Inc (DNA), Hasbro Inc (HAS)

Stock futures were higher this morning after Bank of America joined recent financials and topped Wall Street estimates. Also pushing futures higher is a deal in the pharma sector with Roche bidding nearly $44 billion for the rest of Genentech. However, both Merck and Schering-Plough said they'll postpone reporting their financial results after the close; Apple will also be reporting results then. Finally, oil prices came off a six-week low and are trading back above $130 a barrel due to escalating Middle East tensions. Higher oil prices could dampen the mood on the Street.

Bank of America Corp. (NYSE: BAC), the biggest U.S. consumer bank and home lender, said profit fell 41% to $3.41 billion, or 72 cents a share, much better than analysts estimates of 21 cents according to Bloomberg. The bank curtailed loan losses, adding $2.2 billion to loan loss reserves. The bank has completed the purchase of Countrywide Financial Corp. on July 1. With these results, BAC joins other big banks that have recently reported better-than-expected results. BAC shares are up 8.6% in premarket trading.

Roche Holding on Monday said it was offering $43.7 billion to take over the remaining 44.1% shares of Genentech Inc. (NYSE: DNA) for $89 per share, 8.8% above DNA's closing price Friday. DNA shares are up nearly 18% in premarket trading to $96.50.

Yahoo! Inc. (NASDAQ: YHOO) said Monday morning it settled its fight for control of the board with billionaire investor Carl Icahn. The board will expand to 11 members to include Icahn and the remaining two seats will be filled by the board upon the recommendation of its nominating and governance committee. In addition, Icahn, who owns about 5% on Yahoo common shares, agreed to withdraw his nominees for consideration at the annual meeting and to support the board's nominees. YHOO shares are declining 2% in premarket trading.

Reporting today:

Apple Inc. (NASDAQ: AAPL) is due to report after the close. The tech giant's results will be closely watched after Microsoft Corp. (NASDAQ: MSFT) and Google Inc. (NASDAQ: GOOG) have disappointed last week. Here's a Bloomberg preview. AAPL shares are up 1% in premarket trading.
Meanwhile, Merck & Co., Inc. (NYSE: MRK) and Schering-Plough Corp. (NYSE: SGP) have pushed back reporting their financial results to after the close as well, saying they wanted to first publish research notes for a study of cholesterol medicine Simvastatin are released. According to First Call, analysts are looking for a profit of 83 cents on revenue of $6.05 billion. Merck preview.
American Express (NYSE: AXP) is also due to report after the close. Here's Bloomberg preview.

Time Warner Inc. (NYSE: TWX)'s movie The Dark Knight, the sequel to 2005's Batman Begins, made a record $155.3 million in its opening weekend for Warner Bros., while setting at least five other box-office records. Time Warner rose 0.3 percent to $14.70 on July 18.

Toymaker Hasbro (NYSE: HAS) says second-quarter profit rose to $37.5 million, or 25 cents per share and sales jumped 13.4% to $784.3 million on demand for brands such as Transformers, Littlest Pet Shop and Indiana Jones.

Analysts polled by Thomson Financial expected profit of 22 cents per share and sales of $675.4 million.

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Market highlights for next week: Major earnings releases

Eric Buscemi — 2008-07-18T16:45:00+00:00

Filed under: Earnings reports, Conventions and conferences, Annual meetings, Yahoo! (YHOO), Apple Inc (AAPL), Caterpillar (CAT), Bank of America (BAC), Merck and Co (MRK), Lockheed Martin (LMT), Texas Instruments (TXN)

Monday, July 21

Theravance, Inc. (NASDAQ: THRX)'s PDUFA date for Telavancin for the treatment of complicated skin infections.
Merck & Co., Inc. (NYSE: MRK) to report Q2 earnings; conference call at 9:00am.
Bank of America Corporation (NYSE: BAC) to report Q2 earnings; conference call at 9:30am.
Apple, Inc. (NASDAQ: AAPL) to report Q3 earnings; conference call at 5:00pm.
Texas Instruments Incorporated (NYSE: TXN) to report Q2 earnings; conference call at 5:30pm.

Tuesday, July22

United Parcel Services, Inc. (NYSE: UPS) to report Q3 earnings; conference call at 8:30am.
Halliburton Company (NYSE: HAL) to report Q2 earnings; conference call at 9:00am.
Caterpillar Inc. (NYSE: CAT) to report Q2 earnings; conference call at 11:00am.
Lockheed Martin Corporation (NYSE: LMT) to report Q2 earnings; conference call at 11:00am.
Yahoo!, Inc. (NASDAQ: YHOO) to report Q2 earnings; conference call at 5:00pm.

Wednesday, July 23

Amgen, Inc. (NASDAQ: AMGN)'s PDUFA date rescheduled from 4/23. Management's submission to FDA of robust risk management plan after FDA ODAC panel meeting was considered by FDA as major amendment to Nplate's BLA causing 3-month review extension according to current PDUFA rules.
AT&T, Inc. (NYSE: T) to report Q2 earnings; conference call at 10:00am.
The Boeing Company (NYSE: BA) to report Q2 earnings; conference call at 10:30am.
PepsiCo, Inc. (NYSE: PEP) to report Q2 earnings; conference call at 11:00am.
McDonald's Corporation (NYSE: MCD) to report Q2 earnings; conference call at 1:00pm.
Amazon.com, Inc. (NASDAQ: AMZN) to report Q2 earnings; conference call at 5:00pm.

Thursday, July 24

The Dow Chemical Company (NYSE: DOW) to report Q2 earnings; conference call at 10:00am.
Southwest Airlines Co. (NYSE: LUV) to report Q2 earnings; conference call at 12:30pm.

Friday, July 25

CV Therapeutics, Inc. (NASDAQ: CVTX)'s PDUFA date for supplemental New Drug Application, sNDA and New Drug Application, NDA, for Ranolazine (Ranexa).
Vanda Pharmaceuticals, Inc. (NASDAQ: VNDA)'s and Titan Pharmaceuticals (AMEX: TTP)'s PDUFA date for Fanapta (Iloperidone), a serotonin/dopamine receptor blocking agent for treating Schizophrenia.
Eisai Co., Ltd. (OTC: ESALY) and MGI Pharma's PDUFA date for Aquavan injection (Fospropofol Disodium Injection), a sedative-hypnotic agent in patients undergoing diagnostic or therapeutic procedure.
Schering-Plough Corporation (NYSE: SGP)'s PDUFA date for Organon Asenapine for the treatment of schizophrenia.

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Merck earnings preview: No miracles expected

Melly Alazraki — 2008-07-18T16:25:00+00:00

Filed under: Earnings reports, Forecasts, Merck and Co (MRK)

Merck & Co. (NYSE: MRK) is set to report earnings Monday, July 21, ahead of the opening bell. According to First Call, analysts are looking for a profit of 83 cents on revenue of $6.05 billion, an improvement over the 82 cents per share it reported in the same quarter last year, but a decline over the $6.1 billion in sales. Last quarter, the company beat per-share earnings estimates, but disappointed in sales.

Merck has suffered some bad news this quarter:

The biggest blow was no doubt the FDA rejection of Merck's new cholesterol drug, Cordaptive. With so many drugs coming off patent, the drug company was relying on Cordaptive to contribute as much as $2 billion a year in sales.
Also, prescriptions for Vytorin, co-marketed with Schering-Plough (NYSE: SGP), kept falling. While this was to be expected following the January released study suggesting Vytorin and Zetia may not work well as older generic statins, the impact could be larger than expected.
As for its cervical-cancer vaccine Gardasil, recently an analyst report from UBS questioned whether sales of the vaccine have met Wall Street estimates for the second quarter. UBS has proceeded to downgrade Merck to Neutral from Buy.
Then, only Thursday, Merck announced a program to resolve and fund the $4.85 billion settlement stemming from the Vioxx 50,000 lawsuits. More than 97 percent of eligible claimants now have initiated enrollment in the program and will start receiving checks beginning late next month. In a way, though, this is a good news/bad news sort of thing. Investors like it when outstanding issues are resolved.

Still, not everything was bad and Merck has also taken a few restructuring measures and had some positive reports too:

About a week after the FDA rejected its Cordaptive drug, the pharmaceutical company said it will eliminate 1,200 U.S. sales jobs, about 15% of the drugmaker's sales force. Wall Street reacted favorably.
Also, some analysts believe Merck has experienced strong sales in vaccines and Singulair.
And today, just before the earnings, Citi has initiated coverage on Merck with a Buy, placing a price target of $44 on the shares.

No doubt, the company has its work cut out for it, especially with blockbuster drugs coming off patent. But the stock has definitely been punished, down about 35% year-to-date. Merck shares are up about 1.5% today due to the Citi Buy call, but the question is what kind of growth it has to offer going forward. With no miracles expected Monday, Merck will likely continue where it left off, not a great favorite, but still not a pharma one can write off. Worth to watch.

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Merck (MRK) higher on Buy rating despite Vioxx settlement news

Brent Archer — 2008-07-18T15:21:00+00:00

Filed under: Law, Merck and Co (MRK), Analyst initiations, Options, Technical Analysis

Merck & Co (NYSE: MRK) shares are trading higher today after a Citi Investment Research analyst initiated coverage on the stock with a "Buy" rating, saying the company will benefit as rivals' drug patents expire in the coming year. This is despite news that came out today that Merck will soon start to send out almost $5B in Vioxx settlement checks. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on MRK.

After hitting a one-year high of $61.62 in December, the stock hit a one-year low of $34.49 in June. MRK opened this morning at $37.12. So far today the stock has hit a low of $36.60 and a high of $37.38. As of 1:05, MRK is trading at $37.38, up 42 cents(1.1%). The chart for MRK looks neutral and improving, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.

For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $32.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 16.3% return in just three months as long as MRK is above $32.50 at October expiration. Merck would have to fall by more than 13% before we would start to lose money. Learn more about this type of trade here.

MRK hasn't been below $34.50 at all in the past year and has shown support around $37 recently. This trade could be risky if the company's earnings (due out 7/21) disappoint, but even if that happens, this position could be protected by the support the stock might find at its year low, which is just below $35.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in MRK.

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Not all pharmas are created equal: JNJ beats estimates

Melly Alazraki — 2008-07-15T14:18:00+00:00

Filed under: Earnings reports, Pfizer (PFE), Johnson and Johnson (JNJ), Merck and Co (MRK)

Johnson & Johnson (NYSE: JNJ) shares rose over 2% by 12:45 on a day the market saw some scary dips earlier and the S&P 500 is still in the red.

The health-care giant is rising after it reported its second-quarter financial results, posting an 8% growth in profit to $1.18 per share (excluding one time charges) and a 9% increase in total revenue to $16.45 billion. The results handily beat analyst expectations (according to Thomson Financial) of $1.12 per share, on revenue of $16 billion. Not only that, but the company also increased its 2008 earnings forecast.

J&J execs claim the company wasn't being significantly hurt by the weakened U.S. economy, and judging from the effect of the lower dollar, which was responsible for 5.6% of the 9% higher revenue, perhaps they're right. Still, the company can't ignore that while international sales jumped 16.2%, U.S. sales increased only 2.1%.

But among the different pharmaceutical companies, it seems there is little doubt that J&J is better poised to ride this global economic downturn; as opposed to to pure-play pharmas, J&J has a more diversified business model. Already the difference was clear in this quarter's results and will probably make even more of a difference in the future, as many pharma companies lose sales to generic drug makers when products go off patent.

This is the biggest challenge facing pharmas these days. J&J is no different, but already its consumer products division increased 13.2% this quarter and medical-devices sales rose 12.1%, offsetting somewhat the mere 3.1% in its pharmaceutical division. If this is the kind of sales growth expected for other pharmaceutical companies like Pfizer (NYSE: PFE) and Merck (NYSE: MRK) in the future, it's no wonder their stocks are declining today.

It's important to remember that while CFO Dominic Caruso believes J&J's business is not that correlated to economic cycles, it is, however, affected by inflation and rising costs. As J&J feels margins getting pinched, it will hike prices, it announced. Once again we see how higher prices trickle through to consumers.

Bottom line, J&J seems like a defensive health-care play at the moment. To illustrate, year-to-date, JNJ shares are up some 1.5%, when major drug shares are down nearly 8% and the S&P 500 is down over 16%.

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Earnings highlights: GE, Alcoa, Marriott, Pepsi Bottling, Wal-Mart, Boeing and others

Trey Thoelcke — 2008-07-12T12:40:00+00:00

Filed under: Earnings reports, Forecasts, General Electric (GE), Wal-Mart (WMT), Alcoa Inc (AA), Boeing Co (BA), Family Dollar Stores (FDO), Office Depot (ODP), Wachovia Corp (WB), Merck and Co (MRK), Marriott Intl'A' (MAR), Nordstrom, Inc (JWN)

Here are some highlights from this past week's earnings coverage from BloggingStocks:

Alcoa Inc. (NYSE: AA) Q2 earnings decline on materials costs but beat analysts estimates (see transcript).
Apollo Group Inc. (NASDAQ: APOL) solid Q3 results were accompanied by a share buyback program.
Boeing Co. (NYSE: BA) warned that Q2 results will include a delay-related charge of 22 cents per share.
Cash America International Inc. (NYSE: CSH) predicted Q2 earnings above previous guidance.
EZcorp Inc. (NASDAQ: EZPW) predicted better-than-expected Q3 results due to strong sales.
Family Dollar Stores Inc. (NYSE: FDO) beat Q3 expectations and raised its Q4 guidance.
Flow International Corp. (NASDAQ: FLOW) swung to a better-than-expected Q4 profit on strong demand.
General Electric Co. (NYSE: GE) reported mixed Q2 results and offered an uninspiring Q3 outlook (transcript).
Helen of Troy Ltd. (NASDAQ: HELE) Q1 results were colored by write-downs and other charges.
International Speedway Corp. (NASDAQ: ISCA) Q2 earnings soared while revenue slipped.
Levis Strauss Q2 profitability plunged due to declining sales and higher administrative costs.
Marriott International Inc. (NYSE: MAR) topped Q2 estimates but lowered its guidance (see transcript).

Merck & Co. (NYSE: MRK) was downgraded by a UBS analyst due to its earnings prospects.
Nordstrom Inc. (NYSE: JWN) lowered its Q2 guidance after slow June same-store sales.
Office Depot Inc. (NYSE: ODP) decline in same-store sales cast doubt on its Q2 earnings forecast.
Pepsi Bottling Group Inc. (NYSE: PBG) posted solid Q2 results that beat earnings expectations.
PriceSmart Inc. (NASDAQ: PSMT) Q3 earnings more than doubled on higher revenue and a settlement.
QLogic Corp. (NASDAQ: QLGC) boosted its Q1 guidance, resulting in an analyst's upgrade.
Rocky Mountain Chocolate Factory Inc. (NASDAQ: RMCF) posted Q1 results without full-year guidance.
Ruby Tuesday Inc. (NYSE: RT) forecast full-year earnings 40% higher than Wall Street estimates.
Wachovia Corp. (NYSE: WB) warned of a larger-than-expected Q2 loss as it introduced its new CEO.
Wal-Mart Stores Inc. (NYSE: WMT) raised its Q2 guidance after strong same-store sales in June.
Wolverine World Wide Inc. (NYSE: WWW) reported its 24th straight quarter of record profits.

The earnings crunch begins again next week. Among the many companies scheduled to report are Citigroup Inc. (NYSE: C), Coca-Cola Co. (NYSE: KO), Delta Air Lines Inc. (NYSE: DAL), eBay Inc. (NASDAQ: EBAY), Gannett Inc. (NYSE: GCI), Google Inc. (NASDAQ: GOOG), Harley-Davidson Inc. (NYSE: HOG), Intel Corp. (NASDAQ: INTC), Johnson & Johnson (NYSE: JNJ), JPMorgan Chase & Co. (NYSE: JPM), Mattel Inc. (NYSE: MAT), Microsoft Corp. (NASDAQ: MSFT), Safeway Inc. (NYSE: SWY), United Technologies Corp. (NYSE: UTX), and Wells Fargo & Co. (NYSE: WFC).

Visit AOL Money & Finance for more earnings coverage.

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Closing Bell: Late day recovery fizzles as we enter earnings season

Jon Ogg — 2008-07-07T16:26:00+00:00

Filed under: Yahoo! (YHOO), Alcoa Inc (AA), Federal Natl Mtge (FNM), Merck and Co (MRK)

If we told you that a $3.00-plus drop in the price of oil wouldn't cause a major stock rally, it might only not be a surprise the bears who believe we are headed lower no matter what. Today was one where the markets spent much time in negative territory and then recovering towards the end of the day before making one last dive. If you think it was a quiet day, we had nearly a 300-point difference between today's high in the morning and the lows before today's recovery. These are today's unofficial closing levels:

DJIA 11,227.72 (-60.82)
S&P500 1,252.64 (-10.26)
NASDAQ 2,243.11 (-2.27)
10-YR T-Note 3.93% (-0.043%)
52-Week Lows
Top 10 Analyst Calls

The Walt Disney Company (NYSE: DIS) saw a severe downgrade after Lehman cut it to Underweight on its premium to peers and weakness tied to Theme Park exposure. Shares were down over 2% at $30.22 in today's final minutes.

Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) were both victims of a research note calling the companies as close to needing $75 billion in new capital. Fannie shares were down 16% at $15.68 and Freddie shares were down 18% at $11.82 in today's final minutes. The weakness over at the GSE's fell over into mortgage REIT play Annaly Capital Management (NYSE: NLY), whose shares were off their lows in today's final minutes with a drop of nearly 7% to $14.51.

Merck & Co., Inc. (NYSE: MRK) fell sharply among broadening concerns on drug and biotech stocks. Shares were down some 4.3% at $26.80 in today's final minutes after UBS brought up concerns over its Gardisil vaccine sales.

Shares of Alcoa Inc. (NYSE: AA) were up over 2% at $33.45 in today's final minutes ahead of tomorrow's earnings. We caution against the notion that Alcoa defines earnings season bias.

Just in case you aren't getting tired of the Yahoo! Inc. (NASDAQ: YHOO) merger saga, shares were up 12.4% at $24.00 by today's final minutes on very active shares traded of over 75 million. It appears that Steve Ballmer may be interested in dealing with Carl Icahn if he can manage to get rid of that Yahoo! board of directors. Honestly, if this was a horse race we would be plotting against all the horses and jockeys by now.

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Trade idea for Merck (MRK) downgrade

Brent Archer — 2008-07-07T14:18:00+00:00

Filed under: Analyst upgrades and downgrades, Bad news, Merck and Co (MRK), Options, Technical Analysis

Merck (NYSE: MRK) shares are falling today after an analyst at UBS downgraded the stock to "Neutral" from "Buy," saying that the earnings prospects for the stock don't offer much upside. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on MRK.

After hitting a one-year high of $61.62 in December, the stock hit a one-year low of $34.49 last month. This morning, MRK opened at $37.59. So far today the stock has hit a low of $36.38 and a high of $37.99. As of 1:40, MRK is trading at $36.37, down $2.07 (-5.4%). The chart for MRK looks bullish and improving, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $45 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in three and a half months as long as MRK is below $45 at October expiration. MRK would have to rise by more than 23% before we would start to lose money. Learn more about this type of trade here.

MRK hasn't been above $45 since February and has shown resistance around $38 recently. This trade could be risky if the company's earnings (due out in late-July) are a positive surprise, but even if that happens, this position could be protected by resistance MRK might find at its 50 day moving average, which is currently around $38 and falling.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in MRK.

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Analyst downgrades: MRK, AZN, MI, ONT and ZION

Laurie Pasternack — 2008-07-07T11:44:00+00:00

Filed under: Analyst reports, Analyst upgrades and downgrades, Merck and Co (MRK)

MOST NOTEWORTHY: Merck, On2 Technologies and Zions Bancorp were today's noteworthy downgrades:

UBS downgraded Merck & Co Inc (NYSE: MRK) to Neutral from Buy citing slowing Gardasil trends and vaccine supply issues.
Merriman cut On2 Technologies Inc (AMEX: ONT) to Neutral from Buy to reflect the reduced visibility into financials and management changes.
Baird downgraded shares of Zions Bancorporation (NASDAQ: ZION) to Neutral from Outperform to reflect deteriorating credit quality and growing capital concerns. The firm lowered their target price to $32 from $43.

OTHER DOWNGRADES:

AstraZeneca Plc (NYSE: AZN) was downgraded to Hold from Buy at Deutsche Bank.
JP Morgan lowered Marshall & Ilsley Corporation (NYSE: MI) to Underweight from Neutral.
Acme Packet Inc (NASDAQ: APKT) was downgraded to Neutral from Buy at Piper.

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Before the bell: MER, APPX, AAPL, MRK, DIS, NWS

Melly Alazraki — 2008-07-07T08:13:00+00:00

Filed under: Before the bell, Analyst reports, Analyst upgrades and downgrades, Deals, Apple Inc (AAPL), Walt Disney (DIS), Merrill Lynch (MER), Merck and Co (MRK), News Corp'B' (NWS)

Before the bell: Futures mixed as oil drops, ahead of earnings season kickoff

According to the New York Post Friday, Merrill Lynch (NYSE: MER) is in talks to sell its 20% stake in Bloomberg L.P. back to New York City Mayor Michael Bloomberg. The post cited anonymous sources. But Merrill will likely not end its cash raising efforts there and could also try to sell its 49% stake in investment manager BlackRock (NYSE: BLK). Selling different assets, could bring some $50 billion to cash-strapped Merrill.

APP Pharmaceuticals (NASDAQ: APPX) shares are up nearly 32% to $23.50 in premarket trading after Germany's health-care giant Fresenius said it's going to buy it for up to $4.6 billion, or $29 a share, depending if certain financial targets are met. This marks Fresenius attempt to enter the U.S. market.

Apple Inc. (NASDAQ: AAPL) is set to launch its next generation iPhone Friday. The 3G, or third-generation, phone will be cheaper and faster than its predecessor and could expand Apple's reach to many more countries that rely on that technology. Apple has set a target to sell 10 million iPhones in 2008, and already sold 1.79 million in the first quarter. Analysts have so far kept their target on Apple, such as Lehman reiterating its Overweight on the stock.

Merck (NYSE: MRK) was downgraded to Neutral from Buy at UBS and target price was cut to $40 from $43.

Lehman Brothers downgraded both Walt Disney (NYSE: DIS) and News Corp. (NYSE: NWS). Disney was downgraded from Equal Weight to Underweight and its stock is down 2.9% in premarket trading. News Corp. was downgraded from Overweight to Equal Weight and its price target cut from $26 to $15.

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Early analyst calls (AAPL) (BRCM) (MRK)

Douglas McIntyre — 2008-07-07T07:15:00+00:00

Filed under: Before the bell, Analyst upgrades and downgrades, Apple Inc (AAPL), Merck and Co (MRK), Broadcom Corp'A' (BRCM)

Deutsche Bank downgraded AstraZeneca (NYSE:AZN) to "hold" from "buy", according to MarketWatch.

Lehman Brothers reiterated its "overweight" rating on Apple (NASDAQ:AAPL) ahead of the 3G iPhone going on sale, according to the AP.

UBS downgraded Merck (NYSE:MRK) from "buy" to "neutral", according to Briefing.com. The news service also reports that Piper Jaffray upgraded Broadcom (NASDAQ:BRCM) to "buy" from "neutral."

Douglas A. McIntyre is an editor at 247wallst.com.

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Closing Bell: Bulls win small victory; Bears win 3 quarters in a row

Jon Ogg — 2008-06-30T16:26:00+00:00

Filed under: General Electric (GE), Sirius Satellite Radio (SIRI), Merck and Co (MRK), MBIA Inc (MBI)

The good news is that we saw a Monday buying interest spree after a horrible prior week. Sellers did come in late in the day after the markets traded higher earlier, putting the markets on the verge of a negative day. The bad news is that today was the end of the quarter and it looks like we have now finished down three consecutive quarters in the U.S. stock market. Whether or not it is a bear market seems to depend on whom you consult, but things are tough for the public investor right now. This morning oil was around $143.00 on fresh Iran-Israel tensions and here were the unofficial closing bell levels today:

DJIA 11,338.78 (-7.73)
S&P500 1,279.21 (+0.83)
NASDAQ 2,292.98 (-22.65)
10YR T-Note 3.979% (-0.011%)
TOP 10 ANALYST CALLS

General Electric Company (NYSE: GE) did finally see a bounce after a research analyst came out showing anecdotal evidence that the current discount to the market is very close to major inflection points. Shares of GE were up 1.7% at $26.69 in today's final minutes.

MBIA Inc. (NYSE: MBI) was down more than 10% on liquidity concerns, but the company's stock rallied sharply and shares were up 1.4% at $4.23 in today's final minutes after the company refuted the bad reports out there.

Merck & Co. (NYSE: MRK) finally saw another winning day after a competing cervical cancer vaccine was delayed by the FDA. Merck shares were up 2.4% at $37.86 in today's final minutes of trading.

Myriad Genetics Inc. (NASDAQ: MYGN) was a disappointment today after the company said it would stop development of its Alzheimer's treatment after results failed to show benefits. The stock was down almost 5% at $45.63 on huge volume of 13 million shares in today's final minutes.

Sirius Satellite Radio (NASDAQ: SIRI) saw shares hit by more than 7% down to $1.94 late in the day after the company outlined its first round of savings and forecasts for the merged satellite radio players.

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Merck (MRK) cholesterol drug delayed to 2013

Brent Archer — 2008-06-20T13:43:00+00:00

Filed under: Bad news, Merck and Co (MRK), Options, Technical Analysis

Merck & Co (NYSE: MRK) shares are falling today after the company reported that FDA approval its new cholesterol drug will likely be delayed until 2013. The FDA first rejected regulatory approval of the drug in April, and requested more information from company studies. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on MRK.

After hitting a one-year high of $61.62 in December, the stock hit a one-year low of $34.49 earlier last month. This morning, MRK opened at $35.40. So far today the stock has hit a low of $35.00 and a high of $35.83. As of 12:25, MRK is trading at $35.03, down 57 cents (-1.6%). The chart for MRK looks bearish and steady, while S&P gives the stock a neutral 3 Stars (out of 5) Hold rating.

For a bearish hedged play on this stock, I would consider an October bear-call credit spread above the $42.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in four months as long as MRK is below $42.50 at October expiration. Merck would have to rise by more than 21% before we would start to lose money.

MRK hasn't been above $42.50 since March and has shown resistance around $39 recently. This trade could be risky if the company's earnings (due out in mid-July) are a positive surprise, but even if that happens, this position could be protected by resistance MRK might find at its 50 day moving average, which is currently around $38 and falling.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in MRK.

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Pfizer's path forward: To generics? To biotech?

Jon Ogg — 2008-06-13T13:30:00+00:00

Filed under: Pfizer (PFE), Merck and Co (MRK)

There is a report out of Reuters that may get the drug sector up in a whirlwind if it comes to pass. The implications aren't just that Pfizer Inc. may want to try to counter Japanese drug maker Daiichi Sankyo's bid for a majority stake in India's largest generic drug maker Ranbaxy. Daaichi Sankyo has put in a bid of roughly $4.6 billion for that majority stake.

Pfizer is stuck along with Merck & Co. Inc. (NYSE: MRK) and other Big Pharma drug players between a rock and a hard place as it has a mountain of cash, makes money, but has a perceived weak drug pipeline. If you thought that Big Pharma drug companies were under fire because of generic drugs, the issues may get much more convoluted.

Ranbaxy is India's largest generic drug maker, and India also has some restrictions on foreign ownership of its key companies and infrastructure. Whether or not the Pfizer deal comes to pass, it is becoming more and more inevitable that the big drug companies are going to have to either make more biotech buyouts to purchase better drug pipelines or that generic makers will become targets as a way to fend off the generic pressure. No wonder the short selling is lower in major biotechs.

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