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 (^DJI +1.24%) 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 (FB +1.33%) 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 (WAG +0.00%) 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.
