Johnson & Johnson Deal Highlights Short Trading Day

Johnson & Johnson Deal Highlights Short Trading Day

The Dow Jones Industrial Average us up 0.24% on the back of growing durable goods orders and home sales. It's a short trading day and there's very light volume so the moves across the market are subdued.

On the economic front, the U.S. Census Bureau said durable goods orders in November were up 3.5% from a month prior. Orders were up 1.2%, excluding those for large transportation like aircraft and automobiles, which is a solid gain near year-end. New home sales last month were 464,000, the best reading since July. New home sales help drive employment so this is an important reading for the economic recovery.

Johnson & Johnson makes a sale
The big company news today is Johnson & Johnson's potential $4 billion sale of its blood-testing unit. The Carlyle Group has entered into exclusive talks to buy the unit, beating out Blackstone and Danaher to get this far in the process.

This doesn't guarantee that a sale will be made, but Carlyle has until mid-January to complete due diligence and agree to move forward.

There isn't much reaction in Johnson & Johnson's stock today and one reason is that investors aren't wowed by the discussed price. When the company put the blood-testing unit up for sale in September there was talk of the unit being worth around $5 billion.

Long term, the rationale for the sale is that Johnson & Johnson wants to rid itself of slow-growing or non-market-leading companies. With the cash, it can invest in industry-leading growth or return funds to shareholders.

Markets closed tomorrow
U.S. stock markets closed at 1:00 p.m. EST today and will be closed again tomorrow. Trading resumes a normal schedule on Thursday.

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Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Originally published