The Daily Dow
FOOL GLOBAL WIRE
by Robert Sheard (TMF Sheard)
LEXINGTON, KY. (Apr. 16, 1997) -- The big news for the current Foolish
Four stocks is the story broken by the Wall Street Journal that the big tobacco
companies are apparently in talks to settle once and for all the stream of
litigation facing them.
Some of the rumored provisions of the settlement (and keep in mind what rumors
may be worth) are that the tobacco companies will agree to be regulated by
the Food and Drug Administration regarding stringent restrictions on advertising
and vending machine placement. In addition, the companies will establish
a reported $300 billion fund over the next 25 years to cover health costs
of patients made sick by smoking.
In return, the tobacco companies would be given immunity from further prosecution
by smokers individually, or the states which are looking to recapture insurance
costs spent on caring for smokers.
Such an agreement would still have to jump through a variety of hoops before
it would come into effect, but the fact that supposedly "secret" negotiations
are taking place has cheered Wall Street. Investors in these perennially
strong stocks would love to see an end to the litigation nightmare that's
been facing the industry for years.
On the day, PHILIP MORRIS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MO)") else Response.Write("(NYSE: MO)") end if %> climbed 10.5%, gaining back much
of the recent losses when the latest lawsuit scare knee-capped the stock.
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