Facebook Slides on New Acquisition; Walgreen Gains on Earnings

After yesterday's sell-off, stocks swung back into positive territory today as investors cheered on a strong consumer confidence report. By the end of the day, the Dow Jones Industrial Average  (DJINDICES: ^DJI  ) had gained 91 points or 0.6%, and the S&P 500 finished up 0.4%.

The Conference Board said its reading of consumer sentiment jumped from 78.3 in February to 82.3, its highest mark since January 2008. According to the survey, consumers were more optimistic about job prospects and the economy as a whole, not only indicating their confidence in the economy's continued recovery but also supporting the notion that severe weather cooled off spending this winter. In other news, February new home sales were down slightly, falling from an annual rate of 455,000 to 440,000, below estimates of 445,000. Separately, two other reports showed home prices rising in January, indicating the housing market still seems to be moving in the right direction. 

Just weeks after absorbing WhatsApp for $19 billion, Facebook  (NASDAQ: FB  ) made waves again today, snatching up virtual reality company Oculus for $2 billion. Oculus has no products currently available, but has a virtual reality headset that's soon to hit the market, the Oculus Rift, which has already received more than 75,000 orders from video game developers. While the addition of Oculus may not be of immediate value to Facebook's bottom line, its virtual reality expertise seems to fit in with the social network's mission to make the world more open and connected. Commenting on the deal, Facebook CEO Mark Zuckerberg said, "Oculus has the chance to create the most social platform ever, and change the way we work, play, and communicate."  Facebook shares were trading down 1% on the news as investors didn't seem to share his opinion.

Source: Wikipedia.

Elsewhere, Walgreen  (NYSE: WAG  ) gained 3.3% after reporting earnings this morning. The drugstore chain actually came up short on the bottom line with a profit of $0.91 against estimates of $0.93. Still, same-store sales improved 4.3% on an overall revenue increase of 5.1%, and the company said its integration with its new strategic partner, the British chain Alliance Boots, is proceeding rapidly. Walgreen said the combined synergies with Alliance Boots totaled $236 million in the first half of the fiscal year, and it lifted its savings estimates for the second year of the agreement by $25 million. Gross margin fell 130 basis points to 28.8%, which management said was due to "slower generic drug introductions and severe weather." Finally, Walgreen also said it planned to close 76 stores in the second half of the fiscal year as a part of its store optimization plan, though it still expects a net increase of 55-75 stores for the fiscal year. Despite the dip in profits, Walgreen's long-term plans seem to be on track as it sees $130 billion in 2016 revenue, including the contribution from Alliance.

3 stocks that could become your next huge winner
The one sure way to get wealthy is to invest in a groundbreaking company that goes on to dominate a multibillion-dollar industry. Our analysts have done it before with the likes of Amazon.com and Netflix. And now they think they've done it again with three stock picks that they believe could generate the same type of phenomenal returns. They've revealed these picks in a new free report that you can download instantly by clicking here now.


Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2890268, ~/Articles/ArticleHandler.aspx, 12/21/2014 5:16:34 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 17,804.80 26.65 0.15%
S&P 500 2,070.65 9.42 0.46%
NASD 4,765.38 16.98 0.36%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/19/2014 4:39 PM
^DJI $17804.80 Up +26.65 +0.15%
DOW JONES INDUSTRI… CAPS Rating: No stars
FB $79.88 Up +1.48 +1.89%
Facebook CAPS Rating: **
WAG $73.23 Down -1.15 -1.55%
Walgreen Company CAPS Rating: ****

Advertisement