Snow Slows Shoppers, Not Stocks (WAG, CAG, SNY, CHTT, BUCY, TEX, KIRK)
Stocks had a strong day despite a major snow storm blanketing much of the East Coast, keeping retail crowds sparse on the last Saturday before Christmas, which is traditionally one of the biggest shopping days of the year. Nonetheless, analysts still think this is going to be a good holiday season compared to last year. Healthcare stocks, meanwhile, helped lead the way, as the bill out of the Senate eliminated some of investors’ worst fears and there were a plethora of drug and biotech deals and partnerships announced.
The Home Furnishing Retailer Stocks Index was the top performing tickerspy Index on the day, led by Kirkland’s (Nasdaq: KIRK) with a 9% gain.
Stocks rose on the day, with the Nasdaq leading the way, up 26 points, or 1.2%, to 2,238. The Dow rose 85 points to 10,414, while the S&P jumped 12 points to 1,114. Oil dropped -89 cents to $72.47 a barrel, while gold fell -$15.50 to $1,096.00 an ounce.
In earnings news, pharmacy operator Walgreen (WAG) announced a fiscal Q1 profit that bested analyst estimates. For the quarter ended November 30th, the company earned $489 million, or 49 cents per share, up 20% from $408 million, or 41 cents per share, a year ago. Excluding a restructuring charge, adjusted EPS was 52 cents, 4 cents ahead of estimates. Revenue rose 10% to $16.36 billion, in line with estimates. The stock ended just below breakeven. Over 100 Pro investors counted the stock among their top-15 holdings at the start of Q4, while over 450 tickerspy members included the stock in their portfolios.
Foodmaker ConAgra (CAG) posted a fiscal Q2 profit of $239.7 million, or 54 cents per share, up 43% from $168.1 million, or 37 cents per share, a year earlier. Adjusted EPS was 52 cents, a nickel ahead of the Wall Street estimate. Revenue fell -3% to $3.17 billion, coming in just shy of $3.33 billion consensus. Looking forward, the company raised its full-year forecast for adjusted EPS to $1.73 from $1.70. The stock fell -1.5%. Ten Pro investors counted the stock among their top-15 holdings at the start of Q4, while over 150 tickerspy members included the stock in their portfolios.
In M&A news, French drug giant Sanofi-Aventis (SNY) will acquire OTC drugmaker Chattem (Nasdaq: CHTT) for approximately $1.9 billion, or $93.50 a share, in cash. The deal represents a 34% premium to Chattem’s closing price on Friday. The deal is expected to close in the first quarter on 2010 and be accretive as early as one after. Separately, Sanofi discontinued two late-stage drugs. Shares of Chattem surged 33.1%, while Sanofi shares dropped -0.1%.
Elsewhere, mining equipment maker Bucyrus International (Nasdaq: BUCY) announced it will buy the mining equipment business of Terex (TEX) for $1.3 billion in cash. Terex can also ask to receive $300 million of the purchase price in Bucyrus stock. The acquisition is expected to close in Q1 2010. The deal will make Bucyrus the world’s largest mining equipment maker and allow Terex transform itself into a machinery and industrial products company Terex stock rose 9.0%, while Bucyrus shares rose 9.8%.
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