Rally Comes to a Halt; Time Warner Swings to 4Q Profit; AIG to Pay $100M in Bonuses

Market News

• Time Warner (TWX) reported improving revenue and profits during the fourth-quarter. The media conglomerate has spun-off some of its major businesses over the last year. One of the company’s former businesses, AOL, reported its quarterly earnings independently for the first time in nearly 10 years.
• Pfizer Inc.’s (PFE) acquisition of Wyeth is already paying off. The pharmaceutical company’s fourth-quarter earnings more than doubled from a year-earlier. Pfizer spent $2.8 billion on R&D in the fourth quarter of 2009, but that number is about to be drastically cut.
• Wal-Mart (WMT) just announced a massive amount of job cuts at Sam’s Club, but that must have been a preview of future plans. The retailer said that it will eliminate another 300 positions in northwest Arkansas as part of its efforts to cut costs. The positions are primarily in corporate support areas.
• American International Group Inc. (AIG), which accepted $182.3 billion in US aid, will distribute about $100 million to its financial products division for employee bonuses. President Barack Obama’s pay czar Kenneth Feinburg is outraged by the reports. The insurer is already in the midst of repaying $20 million in bonus payments, as demanded by Feinberg.
• Here’s a Suggestion for AIG and Its $100 Million Bonus Plan
• Cadbury (CBY) Chief Executive Officer Todd Stitzer and Chairman Roger Carr announced they would step down after rival Kraft Foods (KFT) finally won control of the British confectioner. Cadbury shareholders accepted the Kraft offer on Tuesday after a five month bid battle.
• ISM Services Index Improves – The US service sectors returned to growth territory. The ISM non-manufacturing index rose to 50.5% from 49.8% in December. However, the service sector remains week as high unemployment and tight credit put pressure on consumers and businesses.
• Drugstore chain Walgreens (WAG) reported a 1.1 percent drop in same-store sales for January. Front-end same-store sales in the month fell 1%, while pharmacy same-store sales dipped 1.2%. Sales were hurt by lower-priced generic drugs.

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