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Abbott Labs Reports Arthritic Earnings


Pharma company aching now, but patience could pay off.

Minyan Morning Memo

One to Watch: Healthcare behemoth Abbott (ABT) just announced earnings which matched expectations, though the stock is slipping at this early hour. With baby boomers increasingly arthritic and the owners of bum knees and hips, so to speak, long term the shares should be swell for any investor who declares demography is destiny. Among much else it sells Vicodin - the painkiller and its ilk are the most prescribed pill in the country, at least until a recent advisory panel suggested restricting its use on suspected liver damage. Legal issues, generic competition Johnson & Johnson (JNJ) alluded to in its own earnings yesterday and a trifling $1.3 trillion healthcare overhaul present potential headaches. But patience often pays, and in the meantime know that the company has paid dividends ever since the death of Lenin. (Vladimir not John; we're talking 1924.)

What Just Happened: Stocks rose a smidge after Goldman's (GS) earnings exceeded expectations of experienced analysts (as did Intel (INTC) after the close; perhaps it is high time for Wall Street to hire high schoolers?) The Journal is reporting the Justice Department "tightens its derivatives vise" - or vice, as the case may be. And just like Jacko, Billy Mays is bringing in bling from the great beyond. A fact the Times got round to reporting long after you heard it here first.

What's Happening: To adapt an old adage, when equities in America please, the rest of the world catches gold. Asia ended up and Europe is trading higher after a strong start to the week Stateside. U.S. futures are above fair value and oil is over $60 ahead of information on inventories. Goldman's good week continues as it's just been upgraded by Keefe Bruyette, whose banks research is highly respected.

What Will Happen: In economics, the Consumer Price Index for June is out at 8:30 AM Eastern, as is July's Empire Manufacturing Index. Capacity utilization and Industrial Production data are released at 9:15. Minutes for the 6/24 FOMC meeting at 2:00 PM may make markets glance at the rear view mirror. Expect earnings from AMR Corp (AMR), Gannett (GCI), W.W. Grainger (GWW) and Xilinx (XLNX).

Happenstance: Today's CPI report will be closely monitored for any pickup in inflation after yesterday's stronger than expected wholesale reading. The insight into purchasing power it provides is especially important for one individual whose recently recovered wallet went walkabout for over forty years.
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