Traders-Blog.com

Investors were disappointed today as the stocks fell again, but they were thankful that they didn’t reach their lowest 2005 levels. The Dow was down 40.20 points today, closing at 10,427.20.In addition the Nasdaq closed at 2,035.83 after falling 11.32 points, while S&P 500 closed at 1,171.36 after falling 3.19 points.

U.S. fourth quarter stocks were lower than in the previous seven quarters. GD cooled at a low at 3.1% growth rate for the quarter. Wages and salaries suffered the smallest increase since 1999 as they rose only 0.4 percent in the quarter. With the war in Iraq and upcoming elections, investors are wary of U.S. stock purchases.

The U.S. Treasury note rose more today than in the past seven weeks due to a Federal report that economic growth was less than expected last quarter. Slower growth means that there is a smaller likelihood that the Federal Reserve will be increasing interest rates imminently.

Proctor & Gamble announced early this morning that they plan to buy out Gillette Co. in a purchase worth $57 billion. The ensuing company will create the largest consumer products company in the world, selling 21 brands, such as Pampers and Duracell, that each bring in more than a billion dollars in sales each. As the buy was announced, Gillette stocks skyrocketed rising 5.91 points to reach $51.60 by closing.

Merck & Co., one of the largest pharmaceutical companies in the U.S., suffered greatly today as the news continued getting worse. The formal investigation on Merck’s recall of Vioxx, its most popular anti-inflammatory drug, was announced today; the company says the U.S. Securities and Exchange Commission would begin soon. After this unsurprising but disappointing announcement, Merck also discovered that their patent on Fosamax, their popular osteoporosis drug, was ruled by a Federal Court to expire in 2008.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter