Market Muted On Philip Morris

When the Supreme Court backs a $10.1 judgment billion in a company’s favor, the stock should rise. But, in refusing to reinstate a judgment against the tobacco giant, the tobacco company’s parent, Altria, would appear to have gotten an important victory.

The market is cautious about the news. There is another suit brewing, for as much as $200 billion. The action claims that the marketing of "light "cigarettes was a charade meant to fool smokers into thinking the the lower tar butts were safer. The issue of whether the plaintiffs can turn it into a class action suit is still pending.

There has been some euphoria among investors about Altria’s ability to consistently ward off liability suits regarded the safety of cigarettes and what the company knew about the effects of smoking. But, with each new year, another set of claims emerges and the question becomes will one of these eventually break through. If so, Altria’s stock may not continue its stupendous climb.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.