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For the most part, stocks remained flat today, but the Dow rose after the Food and Drug Administration (FDA) announced new possibilities for Merck to bring back Vioxx. The Dow rose 30.96 points to close at 10,785.22. However, the Nasdaq fell 2.72 points, closing at 2,058.62, while the S&P remained flat, gaining only 0.84 points to close at 1,201.59.

Stocks stayed flat most of the day due to the announcement made by the Labor Department that core inflation for wholesale goods had increased in January at the fastest rate in the past six years. The core PPI was supposed to rise only 0.2 percent; however, it rose 0.8 percent by the end of January. Greenspan announced earlier this week that he believes inflation is well-contained, but today’s reports shook up investors.

3M had good news today as the company announced that increased productivity and new lines would help boost sales and keep the company’s earnings growth between 12% and 14% through 2006. The company expects sales upwards of $5.5 billion from new products over the next three years. The company’s stock rose 3 cents late in the day to close at $85.74.

The Food and Drug Administration (FDA) helped to close up the day on a high note when they announced their plans to allow Merck’s controversial drug, Vioxx, to sell on the market again. The drug was stripped from shelves in September when studies showed that the drug could increase heart risk in patients. The panel said that they agreed that the drug, as well as similar drugs such as Pfizer’s Celebrex and Bextra, could cause heart risk in patients, and they also said they were in favor of adding warning labels to the drugs. Despite the good news for Pfizer, analysts agree Merck will find difficulty in returning Vioxx to the shelves and regaining the previous popularity of the drug.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter