U.S. Indexes Hold After 3-day Rally; Walgreen Net Gains 10%

Arthi Gupta
22 Mar, 2011
New York City

U.S. indexes traded mixed after a 3-day rally lifted the Dow 3.5%. Research in Motion scheduled its launch of tablet on April 19. Japan struggles with the radioactive leak and allied attacks fail to dislodge Gaddafi stronghold in Benghazi.

[R]10:40 AM New York – U.S. indexes traded mixed after a 3-day rally lifted the Dow 3.5%. Research in Motion scheduled its launch of tablet on April 19. Japan struggles with the radioactive leak and allied attacks fail to dislodge Gaddafi stronghold in Benghazi.[/R]

U.S. stocks traded sideways in the absence of new economic reports and winding down of the earnings season.

Research in Motion gained after it plans to launch its table computer on April 19. Better than expected earnings lifted stocks of Dollar General and Dollar Thrifty Automotive Group.

Walgreen declined more than 6% after it reported sales increase of 8.9%.

European markets traded sideways on better-than-estimates economic data and Asian markets traded higher as the nuclear concerns in Japan eased and four of the six reactors were connected to power sources at the troubled Fukushima power plant. The Nikkei surged 4.4% on Tuesday.

Media in Japan reports power supply was extended to more areas in the affected regions and rolling blackouts are declining in Tokyo.

Tokyo Electric Power Co. said radioactive substances were detected in seawater near the Fukushima 1 nuclear power plant. TEPCO said radioactive iodine at levels 126.7 times higher than the legal limit and radioactive cesium 24.8 times higher were detected in seawater near the plant.

The operator of the Fukushima nuclear plant in Japan in northeastern Japan resumed efforts today to restore power at reactors a day after gray smoke from the reactor 3 building halted their efforts, news reports said.

Tokyo Electric Power Co. noted that additional repair work needs to be performed before power can be restored to all six reactors.

U.S. Nuclear Regulatory Commission officials said Monday that conditions at Japan''s Fukushima nuclear power plant seem to have improved, though frantic attempts to regain control over disaster-crippled reactors are continuing.

In Libya there are reports that the allied forces are unable to prevent government forces from attacking the rebels. Forces loyal to Libyan leader Muammar Gaddafi have attacked two towns in the west of the country while rebel forces in the east have been pinned down by government troops.

A U.S. F-15E fighter plane crashed in Libya overnight and its crew had to be rescued, according to a statement from the U.S. military. A mechanical failure is believed to be the cause of the crash.

Merck and Sanofi Abandon Animal Health JV Deal

Merck & Co. Inc. and Sanofi-Aventis announced the mutual termination of their agreement to form a new animal health joint venture by combining Merial, the animal health business of sanofi-aventis, with Intervet/Schering-Plough, Merck''s animal health unit.

Subsequent to this announcement, each party will keep its current, separate animal health assets and businesses.

Sanofi-Aventis said “the increasing complexity of implementing the proposed transaction"" was the main reason for abandoning the plans, originally announced in March 2010.

IBM Buys TRIRIGA

International Business Machines Corp. said it agreed to acquire privately-held TRIRIGA, Inc. Financial terms were not disclosed.

Earnings Review

Dollar General Corp. ((DG)), the discount retailer reported fourth quarter net sales increased 9.4% to $3.49 billion from $3.19 billion last year including a same-store sales increase of 3.8% on top of a 7.4% same-store sales increase in the 2009 fourth quarter.

Net income in the quarter surged 155% to $222.55 million or 64 cents per diluted share compared to net income of $87.20 million or 26 cents per share last year, mainly driven by lower one-time charges, and higher same store sales on the strength of consumables.

Jefferies Group, Inc. ((JEF)), the securities and investment banking firm reported first quarter total revenues climbed 33.3% to $966.68 million from $725.37 million a year ago.

Net earnings in the quarter climbed 21% to $87.34 million or 42 cents per diluted share compared to net earnings of $72.14 million or 35 cents per share a year ago.

Walgreen Company ((WAG)), the drugstore chain operator said second quarter net sales increased 8.9% to $18.50 billion from last year''s $17 billion. Net earnings in the quarter increased 10% to $739 million or 80 cents per diluted share compared to net earnings of $669 million or 68 cents per share in the prior year, as the company filled more prescriptions in the quarter.