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Beauty of Allergan's Earnings More Than Skin-Deep


Investing in the company that conquers vanity not entirely in vain.

One to watch: Allergan (AGN) just posted second-quarter earnings which beat expectations. It's among the world's largest specialty pharmaceutical firms, best known for wrinkle remover Botox. Should future sales of frozen foreheads slip, there will be furrowed brows aplenty at the firm: It accounts for approximately 30% of revenues. Hence efforts to expand its flagship product into use for other indications, including migraine headaches.

Reimbursement rates are always an issue for cosmetic medicine companies, especially in recessions, and Botox faces competition from Medicis' (MRX) newly introduced Dysport. Still, with an impressive eye-care product line, including the recently approved Latisse for longer lashes, today's results indicate investing in the company that conquers vanity may not be entirely in vain.

What just happened: It was a good day for Dows. The Dow Jones Industrial Average gained again, goosed by a Goldman upgrade of General Electric (GE), and is on course for its best July in a generation. Meanwhile, Dow Chemical (DOW) shares shot up even as it announced a quarterly loss. Oil rose and was last seen riding around Route 66, gaining $3.59 to $66.94.

What's happening: Asia closed strongly, with Japan's Nikkei welcoming the shoguns of August at 10356.83 -- a high for the year, though still some way shy of its all-time peak of 38957.44 in '89. Europe is concluding a stellar month with strength in banks and British Airways (BAY). Here at home, stocks have opened higher. It's not often that the New York Times and Wall Street Journal are on the same page, but today, both lead with articles about how bankers' bonuses were big, even in the bailout.

What will happen: At 8:30 a.m. Eastern, the Commerce Department came clean and admitted "Honey, I shrunk the GDP" when it announced a second-quarter contraction of 1.0%. Better than expected though still an unprecedented fourth successive decline in this metric. We get the July Chicago PMI at 9:45 a.m. And expect earnings from Chevron (CVX), Constellation Energy (CEG), Dominion Resources (D), ITT Corp (ITT), Mitsubishi (MTU), Public Service Enterprise Group (PEG), Sempra Energy (SRE), and Weyerhaeuser (WY).

Happenstance: Once again we'll be wetter than suddenly sunbaked Seattle this month, though at least it's raining pennies from heaven in New York today. J.C. Penney (JCP) has its no-expense-spared Gotham grand opening this morning, including an appearance from Miss Universe at its Manhattan Mall. If only similar largess was bestowed on our dilapidated National Mall.
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