The Dow Jones industrial Average (DJIA) is poised to extend
Friday's nearly 200-point rally, as Wall Street gains strength from
this morning's flood of merger and acquisition activity. Futures on
the DJIA and the S&P 500 Index (SPX) are trading roughly 6.7
points and 1 point above fair value, respectively, up from session
lows. The Dow vaulted above potential support at the 10,800 level
on Friday, closing just north of 10,850. This region should provide
a backstop for the DJIA heading into the week. Meanwhile,
resistance lies overhead in the 10,950-11,000 area. As for the SPX,
the broad-market index faces a key technical hurdle right out of
the gate this morning at the 1,150 level. Should the SPX overcome
this area this morning, look for 1,150 to provide support.
Otherwise, the index could remain trapped between 1,150 and 1,140
for most of the week.
In merger and acquisition news, Southwest Airlines Co. (
) has agreed to buy AirTran Airways (
) for about $1.4 billion. The deal values AAI at $7.69 per share -
a 69% premium to the stock's close on Friday. Both companies'
boards have already voted in favor of the purchase. Shares of
AirTran jumped 64% premarket, and Southwest shares slipped less
Also in M&A action, Unilever plc (
) has agreed to acquire Alberto Culver Co. (
) for $3.7 billion in cash. The deal values ACV at $37.50 per share
in cash - a 19% premium to Alberto Culver's close at $31.48 on
Finally, Wal-Mart Stores Inc. (
) got in on the buying spree by making nonbinding proposal to
acquire Johannesburg, South Africa-based Massmart Holdings Ltd. for
148 rand ($21.13) per share, or roughly $4.26 billion. Massmart
shares last traded at 134.75 rand per share, meaning that WMT's
deal represents a 9.8% premium. Wal-Mart said that acquiring
Massmart would be "a compelling growth opportunity."
On the earnings front, Cal-Maine Foods Inc. (
), Jabil Circuit Inc (
), and Paychex Inc. (
) are slated to release their quarterly earnings reports today.
Keep your browser at
for more news as it breaks.
There are no major economic reports scheduled for release today.
Tomorrow offers up the Case-Shiller home price index for July and
the Conference Board's Consumer Confidence Index for September. On
Wednesday we'll get the usual weekly report on U.S. petroleum
supplies, while the weekly report on initial jobless claims, the
latest look at second-quarter gross domestic product, and the
Chicago purchasing managers' index come in on Thursday. Friday will
be chock full of economic data. The Commerce Department alone will
report on August construction spending, personal income and
spending, and September auto sales, while the University of
Michigan will give us a final look at consumer sentiment in
September and the Institute for Supply Management will release its
September manufacturing index.
Equity option activity on the Chicago Board Options Exchange (
) saw 1,225,730 call contracts traded on Friday, compared to
703,287 put contracts. The resultant single-session put/call ratio
arrived at 0.57, while the 21-day moving average held at 0.60.
**The volume data shown above is from the Nasdaq and NYSE
exchanges only. It does not include regional volume activity,
which means that other daily volume quotes you see may be
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Overseas trading has a bullish bias this morning, as seven of
the 10 foreign indexes that we track are in positive territory. The
cumulative average return on the collective stands at a gain of
0.44%. In Asia, regional indexes were broadly higher, with Japanese
shares rallying behind exporters due to weakness in the yen. Across
the pond in Europe, stocks traded mixed amid a wave of merger and
acquisition deals, including Unilever plc's (
) $3.7 billion deal for Alberto Culver Co. (
Currencies and Commodities
Trading in currencies and commodities is pretty uneventful this
morning. The U.S. Dollar Index is trading flat heading into the
open, with the index off 0.02% at 79.38. Meanwhile, crude futures
have added 15 cents to trade at $76.64 per barrel in electronic
trading. Finally, gold remains perched just shy of the $1,300
level, with the December contract rising $1.30 to $1,299.40 an
ounce in London.
Unusual Put and Call Activity:
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