Merck's Grinch-like Move Leads the Dow and PVH Pops, but Facebook's Big Buy Falls Flat

The markets appear set today to repeat Tuesday's tooth-grindingly frustrating slide from early gains. With any luck, major indices will also repeat their afternoon bounce, as the Dow Jones Industrial Average (DJINDICES: ^DJI  ) wound up with a 0.6% gain at Tuesday's closing bell and the S&P 500 closed with a 0.4% improvement after nearly zeroing out by lunchtime. Today is still up in the air, but the two indices have both fallen sharply off their morning rises as of 12:10 p.m. EDT. The Dow remained up by 18 points, while the S&P was a slim three points above breakeven..

Nonetheless, some stocks remain strong heading into the afternoon -- the Dow's gain was led by Merck's  (NYSE: MRK  ) 1.9% rise, while the S&P 500's best stock is diversified midrange apparel company PVH (NYSE: PVH  ) , which has gained 5.4 % as of 12:30 p.m.. However, some notable S&P 500 stocks are holding the index back from greater gains -- International Game Technology (NYSE: IGT  ) was the index's worst stock this morning, with a 8% decline, and $160 billion social network Facebook (NASDAQ: FB  ) is the worst megacap of the morning after its widely panned Oculus Rift acquisition pushed share prices 3.7% lower.

Merck is up for a decidedly Grinch-like business move -- the drugmaker will reportedly cease subsidies to low-income patients to help pay for costly prescription pills. This is likely to cause political blowback and may result in a scramble on Capitol Hill to clear up the regulatory issues regarding this practice, since some classes of drugs, particularly those used to treat rare chronic conditions, can cost thousands of dollars each year.

PVH, which has a globally recognized stable of middle-class brands that include Calvin Klein, Tommy Hilfiger and IZOD, and which also licenses a number of other fashion brands, rose today despite posting a mediocre fourth-quarter earnings report after yesterday's closing bell. The apparel company's $2.05 billion in revenue missed estimates of $2.08 billion, but its adjusted earnings of $1.43 per share beat estimates by a penny. However, investors seem unconcerned that margins might shrink in 2014, as PVH provided full-year guidance of roughly $8.5 billion on the top line and a range of $7.40 to $7.50 in EPS -- both of which fall below Wall Street's expectations of $8.58 billion in revenue and $7.79 in EPS. The company expects foreign currency effects to account for roughly $0.15 per share of this shortfall and is blaming another $0.10 per share in foregone profit on its abandonment of its Bass brand's retail operations.

International Game Technology is sinking after it updated its guidance  last evening. The casino-equipment specialist now expects to earn between $0.17 and $0.19 per share for its fiscal second quarter, which is well below Wall Street's expectations of $0.29. Full-year guidance of $1 to $1.10 per share also disappointed analysts who were looking for $1.20 per share. The company will now enact cost-cutting measures that will lay off 7% of its workforce, which is expected to save $30 million this year and $50 million on a full-year basis thereafter.

Source: Sergey Galyonkin via Flickr.

Everyone in tech is talking about Facebook today after the free-spending social network shelled out $2 billion for virtual-reality hardware start-up Oculus VR, maker of the hotly anticipated Oculus Rift headset. CEO Mark Zuckerberg painted the buy as making his company "ready for the platforms of tomorrow," but Oculus' core supporters, who were looking forward to playing next-generation video games in a fully immersive way, lashed out at the deal.

Oculus got its start with a Kickstarter campaign, and some of those early backers went back to that fundraising page to ask for refunds. Renowned game developer Markus "Notch" Persson of Minecraft fame also slammed the buy on his blog, saying "I don't want to work with social, I want to work with games" and rejecting the system's new owner as a company whose "motives are too unclear and shifting, and they haven't historically been a stable platform. There's nothing about their history that makes me trust them, and that makes them seem creepy to me." This is likely to become a rallying cry for independent developers, and we're bound to see competing virtual reality headsets attract greater attention and investment funding now that Facebook's put a 10-figure price tag on one of the space's earliest movers.

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