12:45pm (EST)
It’s been a slow day of trading although the bears took an early stab at stocks and pushed the market lower at the open. The bulls have battled back somewhat but they didn’t seem too inspired despite a flurry of merger and acquisition (M&A) news today. The lack of follow-through from Friday’s big push isn’t a good sign to start the week and the bulls will face major resistance levels if they do mount a rally today.
In corporate news, Intel (INTC, $18.07, down $0.30) said it was buying Infineon Technologies AG’s wireless-solutions business for nearly $1.4 billion in cash. This wasn’t a huge deal for Intel, which warned of lower revenue growth for the current quarter, but it was a smart one. The deal with Infineon will bolster Intel’s internet business and allow the company to offer a full range of wireless options, including 3G, Wi-Fi and Wi-Max.
3M (MMM, $80.29, down $0.71) stepped-up to the plate and offered Cogent (COGT, $10.72, up $1.81) $10.50 a share to do a deal. Shares are up 20% and Wall Street is valuing the marriage at $1 billion. 3M is in love with Cogent’s toys which capture electronic fingerprint and palm print images that can then be used to encode prints into searchable files. This allow cross-referencing and companies or agencies can then compare a set of prints to a database.
And finally, in a deal that looks like the ante may have to be raised, Genzyme (GENZ, $70.10, up $2.48) is up 4% after rejecting Sanofi-Aventis (SNY, $29.03, up $0.11) proposal to acquire them for $69 a share in cash. Genzyme has an impressive drug in its pipeline and could be holding out for $80-$85 a share. They think they have something special with Campath, a multiple sclerosis drug that is in the experimental stages, and Genzyme wants a bigger premium to account for potential sales.
As we head to press, the Dow is down 68 points, or 0.7%, and is at 10,082. We mentioned in our Weekly Wrap that resistance would come in at 10,200 and the low for the day has been 10,071.
The S&P is lower by 7 points, or 0.7%, and is at 1,057. The index continues to have trouble with the 1,070 level and a break below 1,040 will not be good for the bulls. The S&P has traded to a low of 1,056 today.
The Nasdaq is once again leading the way to the downside as the index is off by 16 points, or 0.8%, to 2,137. Tech has traded to a high of 2,154 and the 2,150 level continues to act as strong resistance. Support is at 2,100 and then 2,050.
We have updated all of our current trades and we have spent much of the morning looking for new trades this week. There are a few we like, but we want to do more research before adding them to our Watch List which is already exploding with possible plays were are eyeballing. Subscribers, check the Members Area for the updates.
Tags: 3M, GENZ, INTC, option picks, SNY, stock options trading
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on Monday, August 30th, 2010 at 12:48 PM and is filed under Market Commentary, Mergers and Acquisitions.
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M&A News Doesn’t Excite Market
12:45pm (EST)
It’s been a slow day of trading although the bears took an early stab at stocks and pushed the market lower at the open. The bulls have battled back somewhat but they didn’t seem too inspired despite a flurry of merger and acquisition (M&A) news today. The lack of follow-through from Friday’s big push isn’t a good sign to start the week and the bulls will face major resistance levels if they do mount a rally today.
In corporate news, Intel (INTC, $18.07, down $0.30) said it was buying Infineon Technologies AG’s wireless-solutions business for nearly $1.4 billion in cash. This wasn’t a huge deal for Intel, which warned of lower revenue growth for the current quarter, but it was a smart one. The deal with Infineon will bolster Intel’s internet business and allow the company to offer a full range of wireless options, including 3G, Wi-Fi and Wi-Max.
3M (MMM, $80.29, down $0.71) stepped-up to the plate and offered Cogent (COGT, $10.72, up $1.81) $10.50 a share to do a deal. Shares are up 20% and Wall Street is valuing the marriage at $1 billion. 3M is in love with Cogent’s toys which capture electronic fingerprint and palm print images that can then be used to encode prints into searchable files. This allow cross-referencing and companies or agencies can then compare a set of prints to a database.
And finally, in a deal that looks like the ante may have to be raised, Genzyme (GENZ, $70.10, up $2.48) is up 4% after rejecting Sanofi-Aventis (SNY, $29.03, up $0.11) proposal to acquire them for $69 a share in cash. Genzyme has an impressive drug in its pipeline and could be holding out for $80-$85 a share. They think they have something special with Campath, a multiple sclerosis drug that is in the experimental stages, and Genzyme wants a bigger premium to account for potential sales.
As we head to press, the Dow is down 68 points, or 0.7%, and is at 10,082. We mentioned in our Weekly Wrap that resistance would come in at 10,200 and the low for the day has been 10,071.
The S&P is lower by 7 points, or 0.7%, and is at 1,057. The index continues to have trouble with the 1,070 level and a break below 1,040 will not be good for the bulls. The S&P has traded to a low of 1,056 today.
The Nasdaq is once again leading the way to the downside as the index is off by 16 points, or 0.8%, to 2,137. Tech has traded to a high of 2,154 and the 2,150 level continues to act as strong resistance. Support is at 2,100 and then 2,050.
We have updated all of our current trades and we have spent much of the morning looking for new trades this week. There are a few we like, but we want to do more research before adding them to our Watch List which is already exploding with possible plays were are eyeballing. Subscribers, check the Members Area for the updates.
Tags: 3M, GENZ, INTC, option picks, SNY, stock options trading
This entry was posted on Monday, August 30th, 2010 at 12:48 PM and is filed under Market Commentary, Mergers and Acquisitions. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.