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1:00pm (EST)
The bulls came out in a buying mood this morning as mergers and acquisitions (M&A) activity continues to pick up and more information about a possible European bailout of Greece has lifted the market.
At midday, the Dow is up 80 points, or 0.8%, to 10,404, while the S&P has climbed 10 points, or 0.9%, to 1,114. The Nasdaq is showing the most strength as the index is up 31 points, or 1.4% to 2,270.
We mentioned the AIG (AIG, $26.30, up $1.53) news this morning and in other M&A activity, OSI Pharmaceuticals (OSIP, $56.41, up $19.39) is up a whopping 52% after getting a buyout offer from Japanese drugmaker, Astellas Pharma. The $3.5 billion takeover offer for OSI Pharmaceuticals is being presented directly to shareholders after being rebuffed several times by executives at OSI.
We saw some action in shares of OSI last week but we didn’t think a buyout was right around the corner. Too bad. The March 35 calls (GHU100320C00035000, $20.90, up $18.70) are up 850%…
In economic news, the Commerce Department said personal spending rose 0.5% in January. Wall Street was looking for an increase of 0.4%. However, personal income edged up 0.1%, below the 0.4% forecast by the pencil pushers. It was the slowest growth in income in four months.
Meanwhile, the Institute for Supply Management (ISM) said its manufacturing index fell to 56.5 in February from 58.4 in January. Wall Street was looking for a print of 58. The one silver lining was that the report sees manufacturing employment improving. The ISM releases its services industries index on Wednesday.
Before we go, we thought we would mention the strength Sandisk (SNDK, $31.95, up $2.80) is showing today after the company boosted its first-quarter guidance to reflect more demand for memory chips. The 9% pop has the stock at a new 52-week high. Sandisk was on our Watch List but we just missed bagging a 200% return…
We have some other trades that are doing really well today but obviously we are disappointed we didn’t pull the trigger on Sandisk last week. Current subscribers, check the Members Area for the juicy updates.
Dow Goes For Five
Friday, April 23rd, 2010
9:00am (EST)
The Dow continued its winning ways on Thursday as the bulls battled back from a 1% drubbing to take the Dow higher for the 4th straight day. The bears were doing some damage as the market started with a quick trip into negative territory with disappointing forecasts from eBay (EBAY, $24.78, down $1.51) and Qualcomm (QCOM, $39.33, down $3.30) fueling the fire.
Qualcomm beat on earnings and raised their dividend but gave weak guidance going forward while eBay echoed the same latter comments. However, the bulls used other good earnings news and forecasts to lift the market higher as Sandisk (SNDK, $42.22, up $4.63) and Starbucks (SBUX, $27.25, up $1.86) reported outstanding results.
There were a couple of economic reports that also helped the bulls’ case.
The Department of Labor said the number of Americans filing new claims for unemployment fell to 456,000 last week from 484,000 in the previous week.
Meanwhile, the National Association of Realtors reported existing home sales rose 7% to a 5.35 million units from a 5.02 million. Wall Street was expecting sales to come in at 5.28 million.
As a result, the market finished with slight gains asthe Dow ended at 11,134, up 9 points. The S&P 500 added 3 points to finish at 1,208 while the Nasdaq added two touchdowns and settled at 2,519.
Selling was intense for much of yesterday after Moody’s (MCO, $26.06, up $0.37) downgraded Greece’s debt ratings (after the fact) while President Obama preached to America about how terrible Wall Street is.
It’s Friday, so we are going to take a jab.
Wall Street shouldn’t take the brunt of the financial woes…it was everybody in America who got in when the gettin’ was good. Wall Street didn’t write all of the subprime loans and 2nd mortgages that brought the housing market to its knees. Does Washington realize how many mom and pop realtors popped up and the real estate agents and appraisers who worked the deals? Did ALL of them work for Wall Street? Didn’t think so.
Was it really realistic that someone who made $8 an hour was able to afford a $300,000 home? No. Yet, realtors we selling them a home based on “no doc” loans. Credit rating below 500? No problem. Anybody could get a loan and if you didn’t make enough you could get a loan based on what you thought you would make in the future.
Back in the day you had to work you butt off to get a house (we did) and the process took months. At the height of the housing bubble, deals were done in a day or so.
So, in the end it was all of us from around the world who caused this mess, not just Wall Street.
We said a few weeks ago that Washington is smarter than Wall Street but wanted to set the facts straight… at least from our point of view.
Moody’s is a joke but that is for another day. If you get bored over the weekend, use our “Search” feature to scan the archives for our two cents on the company.
Some of our trades are making some nice moves so we want to get our subscribers in the Members Area. As we head to press, Dow futures are up 4 points to 11,072 while the S&P 500 futures are higher by 2 to 1,203. Nasdaq 100 futures are up 8 to 2,044.
Tags: eBay, MCO, option picks, option signals, options alerts, QCOM, SBUX, SNDK, stock options trading
Posted in Company Commentary, Earnings, Market Commentary | Comments Off