The Dow fell 48 points, or .4% to close at 10,812. Banks led the market lower. Bank of America fell over 2% in trading today closing at $13.24. JP Morgan close off 1.6% at $39.08. The S&P 500 shaved off 6.5 points or .6% to close the session at 1,142. The Nasdaq also fell 11 points, or .5% to close at 2,369.
In merger news today, Southwest Airline (LUV) said it would purchase Air Tran (AAI) in a deal estimated at $1.4 billion, or $$7.69 per share. Air Tran soared over 60% today. Rivals Jet Blue and AMR also closed higher with this news. Also, consumer products firm Unilever PLC (UL) announced it’s intent to purchase hair care maker Alberto Culver (ACV) in a deal valued at $3.7 billion. Alberto Culver soared 19% and Unilever gained a little over 1% today.
The stock I'm looking at today is Herbalife (HLF). Herbalife is a direct seller of weight-loss shakes and other nutritional products. Herbalife derives more than 60% of it's sales from it's weight loss shakes. Driving sales of such a competitive product is what Herbalife does best. They've recently raised earnings estimates for all of 2010 and they expect sales to grow 15% this year. They've recently announced an increase in their quarterly dividend by 25 cents and they just announced a plan to buy back $51 million of their stock in the second quarter. Herbalife retreated today and it looks like it's headed back to the 20-day moving average. It closed today at $58.82 and if it can retreat back to it's 50-day (approximately $55), that would be a good entry point. This stock has been consolidating around the $60 range and could be a good first target.
As always, stay cautious. Tuesday's economic reports will bring us the Case/Schiller home price index and later in the morning, the Conference Board will be releasing their monthly consumer confidence index (consensus is 52.0).
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