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Stocks Hold Small Gains, Waiting For Clarification From Fed; American Airlines, US Air Cleared For Merger

By: MT Newswires
Posted: 12/9/2013 9:19:00 AM
Referenced Stocks: COV;KKR;LCC;SYY;WWAV

Last Friday's better than expected jobs report continues to provide modest support to the equities market this morning with futures holding onto conservative gains ahead of a flurry of remarks expected from some of the more hawkish members of the Federal Reserve. Without any economic data, comments from Fed Presidents Lacker, Bullard and Fisher will be closely examined for clues as to the Fed's bias especially after the November jobless rate fell to 7.0%.

Overseas markets were mixed with bullish Chinese trade data unable to prevent weakness in European markets. Bearish EU-zone economic data including German industrial production, Swiss retail sales and a decline in EU investor confidence all weighed on European bourses with the FTSE currently trading in the red.

Merger Monday kicks off with the long-awaited merger between American Airlines and US Airways ( LCC ) who have been cleared for take-off after the U.S. Supreme Court declined a challenge from a consumer group that the merger would lead to higher airfares. The new company will trade on the Nasdaq exchange under the symbol AAL.

Also, SYSCO Corp ( SYY ) has agreed to acquire US Foods from private-equity firm Clayton, Dubilier & Rice and Kohlberg Kravis Roberts ( KKR ) for $3.5 billion. WhiteWave Foods ( WWAV ) has acquired privately-owned Earthbound Farm, the largest organic producer in North America, for $600 million, while Covidien ( COV ) is buying Given Imaging (GIVN) for $860 million.

-Dow Jones Industrial up 0.04%

-S&P 500 futures up 0.11%

-Nasdaq 100 futures up 0.15%

SENTIMENT

Nikkei up 2.29%

Hang Seng up 0.29%

Shanghai Composite up 0.05%

FTSE-100 down 0.09%

DAX-30 up 0.37%

PRE-MARKET SECTOR WATCH

(+) Large cap tech: higher

(+) Chip stocks: higher

(+) Software stocks: higher

(+) Hardware stocks: higher

(+) Internet stocks: higher

(+/-) Drug stocks: mixed

(+) Financial stocks: higher

(+) Retail stocks: higher

(+) Industrial stocks: higher

(+) Airlines: higher

(+) Autos higher

UPSIDE MOVERS:

SYY (-27.60%) Agreed to acquire private food distributor US Foods for about $3.5 billion excluding debt.

UQM (+24.10%) Received approval Friday from the U.S. Department of Energy for the continuation of a grant to manufacture and deploy electric drive vehicles, batteries and electric drive vehicle components.

ADXS (34.54%) Licensing deal under which Taiwan's Global BioPharma will develop and commercialize its ADXS-HPV for the treatment of human papillomavirus (HPV)-associated diseases.

DOWNSIDE MOVERS:

LAYN (-4.5%) Reports Q3 revenue of $216.5 mln, down from $281.3 mln in the year ago quarter and below the analyst consensus of $244.6 mln on Capital IQ. Pre-tax loss was $0.99, vs. year ago income of $0.38 per share.