Goodyear Tire (GT)
Per the Associated Press:

“The Goodyear Tire & Rubber Co. is offering buyout packages to 550 workers at its tire plant in Union City, Tennessee, as the company reduces costs due to weak demand. Goodyear, the biggest US tiremaker, said the downsizing will result in an after-tax restructuring charge of approximately $60 million primarily in the second quarter of 2009.”

My thoughts on the overall situation:

1. The news doesn’t affect my long-term feel that this stock is a great play. My big-picture thinking is as stupidly simple as this: Over time, populations will likely increase. Therefore, the number of all types of vehicles will go up, increasing the demand for tires. Unless, of course, I’m totally wrong and the Flintstone mobile finally becomes a reality.

2. Obviously, I’m not too crazy about the loss that analysts are predicting this year. But if it can hit the $1.21 estimate for 2010, the stock could have some nice upside from these current levels.

Walgreen Co. (WAG):
 I certainly don’t think the big-name drug store’s earnings results are going to be a cure-all. But they weren’t all that bad, either.

In the period, it earned $0.53; analysts were looking for $0.56. Meanwhile, its sales line came in a bit north of $16.2 billion, which did appear to be better than expected.

My thoughts:

1. I'd hoped the bottom line would've come in a little better, and I’m guessing investors did, too.

2. With the larger market looking like it could take a hit at the open and these not-so-terrific numbers, it may take a hit in early trading.

3. I'd view a sell-off as an opportunity. Ideally I’d like to pop open this prescription bottle in the mid $20s.

4. It's going to need a few quarters of beating expectations for investors to really warm up to this story again.

Merck (MRK):
 There was some news out this morning that deserves a look.

According to the Associated Press:

“Drugmakers Merck and Co. and Schering-Plough Corp. (SGP), which are in the process of a $41.1 billion tie-up, said Monday the Federal Trade Commission has asked for more information about the deal. Merck of Whitehouse Station, NJ, and Schering-Plough, Kenilworth, NJ, said they expected the request, which was made under federal antitrust law. The companies intend to cooperate with the request.” 

I'm not reading into this news one way or the other. That said, if something happens and the deal gets nixed, I think the shares of both companies get battered like a screen door in a hurricane. I think both Merck and Schering need this combination to happen.

Have a great day!