Tobacco Companies Win In Florida Court Ruling (MO, CG, RAI)

Excerpt from our One Page Annotated Wall Street Journal Summary (get it e-mailed to you every morning by signing up here):

Tobacco Industry Wins Big At Florida High Court and Tobacco Victory Lifts Industrials By 73.48 Points

• Summary: The largest punitive damages award ever against cigarette makers ($145 billion) was thown out by a Florida Supreme Court ruling that found it 'excessive as a matter of law.' Atria (MO), parent company of Philip Morris, rose 6% on the news. The ruling 'illustrates the major change in the litigation landscape for cigarette makers, which just a few years ago were dealing with concerns about their viability.' Altria benefits internally as well, for the ruling clears the way for the spinoff of its Kraft Foods business and separation of its international tobacco business from its domestic one. The court did, however, rule that cigarette smoking causes disease and is addictive, and that the tobacco companies conspired to conceal its dangers -- allowing for individual lawsuits to persist.
• Comment on related stocks/ETFs: David Fry wonders if trial lawyers hedge their verdict outcomes by going long MO. If you have pangs of conscience when investing in cigarette companies, you're not alone. Note that RJ Reynolds (RAI), another beneficiary of the ruling, is expanding into smokeless tobbacco.