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Stocks Slip; Caterpillar, United Tech Climb; This Top Chip Stock Breaks Out

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Stocks opened to thin losses Monday, as merger news and analyst actions stirred early trade, ahead of the start of the fourth-quarter reporting season later in the week.

[ibd-display-video id=3070286 width=50 float=left autostart=true]The Dow Jones industrial average dipped 0.1% as Apple ( AAPL ), Pfizer ( PFE ) and JPMorgan ( JPM ) turned lower.

The Nasdaq Composite reversed its opening loss to a narrow gain, with three of the four FANG stock tech leaders posting early advances. The S&P 500 edged 0.1% lower, with some big names including Citrix Systems ( CTXS ) and Intel ( INTC ) dragging in early action.

The week in news gets off to a slow start, although medical stocks may be in motion on news spinning out of JPMorgan's four-day health conference. The economic and earnings calendars pick up later in the week, beginning with quarterly reports from homebuilder Lennar (LEN) and Delta Air Lines (DAL) on Wednesday and Thursday.

Reports on Friday from JPMorgan ( JPM ), PNC Financial (PNC) and Wells Fargo (WFC) mark the official start of the fourth-quarter earnings season.

United Technologies, Caterpillar Get Upgrades; Nvidia Breaks Out

On the Dow, UnitedTechnologies (UTX) jumped 1.3%, while Caterpillar (CAT) climbed 0.8%.

Goldman Sachs upgraded United Technologies to buy from neutral, citing tax reform benefits. That eased trouble at United's Pratt & Whitney jet engine unit, and the company's pending acquisition of Rockwell Collins. United shares are taking new highs, and are extended above a 120.05 buy point in a cup-with-handle base.

Caterpillar received an upgrade from JPMorgan, which lifted the stock to overweight from neutral and boosted its price target on the stock by 40% to 200. New tax rules implemented by the GOP late last year are likely to boost the company's cash flow and extend the up cycle for the North American construction business, the note said. The stock opened at a new high , as Caterpillar is extended above a 140.54 buy point after a late-November breakout.

Seagate Technology (STX) spiked more than 10% at the open. News reports reiterated the storage data leader's stake in Ripple, a cryptocurrency owner. ValueStreet Research valued Seagate's position at up to $7.8 billion. The move marked a breakout past a cup-with-handle buy at 43.17.

Chip stocks showed some early momentum, with Nvidia (NVDA) up more than 2%. The gain sent the IBD 50 name Nvidia above a 218.77 buy point in a six-week cup base .

Applied Materials (AMAT) opened 1.5% higher. The stock, also on the IBD 50 list, is back above support at its 10-week line as it climbs the right side of a seven-week cup base .

U.K.-based Micro Focus International (MFGP) dived 16% at the open. The legacy software leader, a component of London's FTSE 100 index, forecast lower-than-expected revenue and announced a change of its chief financial officer. The company is struggling with its $8.8 billion acquisition of Hewlett Packard Enterprise's (HPE) software business, completed in late 2016.

Celgene (CELG) shares rose more than 1% after the company said it would make a $1.1 billion upfront payment to acquire privately held Impact Biomedicines. The deal includes potential milestone payments, raising the possible total value to near $7 billion . Celgene shares are up 11% from an October low, but still deep in a three-month consolidation.

Belgium-based biotech Ablynx (ABLX) spiked 45% higher in premarket trade. The October IPO reportedly received a 33.66 per share takeover offer from Novo Nordisk (NVO), but management said the offer significantly undervalues the company.

China, Japan Markets Jump; Two Fed Speeches Coming Up

Asian stock market posted stout gains Monday, with China's Shanghai Composite up 0.5%, and in Japan Tokyo's Nikkei 225 soaring 0.9%. Benchmarks were mixed in Europe, where London's FTSE 100 sagged 0.2%, while the CAC-40 in Paris gained 0.3% and Frankfurt's DAX was up 0.3% in afternoon trade.

In Monday's scheduled economic news, the Federal Reserve's consumer credit data for November are due out at 3 p.m. ET. Atlanta Federal Reserve Bank President Raphael Bostic speaks in Atlanta at 12:40 p.m. ET. San Francisco Fed President John Williams is scheduled to speak at 1:45 p.m. ET.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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