Walgreen Withdraws Bid for Longs Drug Stores Walgreen ( WAG) has decided to drop its pursuit of Longs Drug Stores ( LDG), citing the broad financial meltdown. Walgreen had offered $75 per share in cash -- which was higher than the CVS Caremark ( CVS) offer of $71.50 per share in cash. The board for Long's Drug Stores refused to discuss any agreement with Walgreen's management. We think Walgreen is making the best move it can at this time. The credit markets are tough -- so financing for any deal may have come at a prohibitive cost. We advised investors to take profits on the run-up in LDG shares back in mid-September, when shares jumped up to $76 right after the WAG offer. That call looks even better now -- after Walgreen's subsequent withdraw. None of the stocks mentioned above are on our "Recommended" list. MetLife/Hartford Financial Services Reportedly Mulling Merger It appears that MetLife ( MET) and Hartford Financial Services ( HIG) may be considering a potential merger, according to a Wall Street Journal report. According to the WSJ, MetLife recently approached Hartford regarding a merger -- but the talks "didn't lead anywhere." Both companies have seen their stock prices hit hard over the last month and have taken steps to increase their liquidity. Hartford Financial recently got a $2.5 billion capital infusion from Allianz SE -- Europe's biggest insurer -- while MetLife raised nearly $2 billion after an offering of 75 million shares at $26.50 per share. MetLife also announced a plan to cut jobs -- but didn't offer details about that plan. We prefer either company look for a stronger partner, rather than the thought of putting two struggling companies under one roof. Basic arithmetic states that when you multiply two negative numbers, you get a positive, but we're not sure that rule applies on Wall Street.
We caution investors against bottom-fishing in either company at this point. MetLife is not recommended at this time, holding a Dividend.com Rating of 3.1 out of 5 stars. Hartford Financial Services is not recommended at this time, holding a dividend.com rating of 3.0 out of 5 stars. Men's Wearhouse Cuts Earnings Outlook on Shopping Slowdown Men's Wearhouse ( MW) announced after the bell yesterday that it is cutting its third-quarter earnings outlook Wednesday by about 30%. The company is seeing fewer shoppers amid the current economic slowdown. Management specifically cited reduced traffic levels from previous expectations -- largely a direct reflection of the recent turmoil in the credit markets -- which appears to be impacting recent consumer buying patterns. The company now expects to earn between 22 cents and 26 cents per share -- below its previous guidance of 34 cents to 38 cents per share. We have avoided the shares since we began coverage in early June. At the time, the stock was trading around the $20 level. We remain cautious on MW and its 1.59% dividend yield -- based on last night's closing stock price of $17.64. Men's Wearhouse is not recommended at this time, holding a Dividend.com Rating of 3.0 out of 5 stars. IBM Reaffirms Earnings Guidance, Stock Will Be a Key to Today's Trading IBM ( IBM) gave investors a bit of optimistic news last night as the company affirmed its full-year outlook after the bell yesterday. The stock was up nearly $5 after hours -- when the company said its third-quarter net income jumped 20 percent to $2.8 billion. Some of the gains were currency-related, however, so we will see how this news plays out when the market digests its. Similar to Oracle's ( ORCL) pattern of meeting earnings expectations, IBM's key to success has been retention of its services and software contracts. It should be interesting to see if this news can muster a sustainable rally in IBM shares, which have dropped over $25 in the last seven trading sessions. We had removed shares from our "Recommended" list back on Sept. 9, when shares were trading at the $115 level. IBM is not recommended at this time, holding a Dividend.com Rating of 3.4 out of 5 stars.