Published February 14, 2011
FOX Business: The Power to Prosper
Wall Street reached the finish line with a mixed picture on Monday as the S&P 500 notched fresh two and-one-half-year highs, but the blue chips failed to join the party.
The Dow Jones Industrial Average fell 5.07 points, or 0.04%, to 12268.19, the Standard & Poor's 500 rose 3.17 points, or 0.24%, to 1332.32 and the Nasdaq Composite gained 7.74 points, or 0.28%, to 2817.18. The FOX 50 added 1.34 points, or 0.14%, to 948.55.
Wall Street mostly yawned its way through Monday's session, with the blue chips moving in an exceedingly tight trading range of just 40 points and trading volume very light.
There weren't any major economic or earnings reports to move the needle and traders mostly shrugged off a pair of new M&A deals and the spreading turmoil in the Middle East. That meant Wall Street preserved the 450-point, or 3.8%, surge on the Dow over the past two weeks, which is good for its best two-week performance since July 2010.
“The market needs to take a breath and even pull back,” but, “the money continues to pour into equities,” Ben Willis, a NYSE trader at Sunrise Securities, told FOX Business, “It’s very hard to fight that trend. The continuation of buying the dips is still the most profitable trade.”
Roughly half of the Dow's 30 stocks advanced, led by energy heavyweights ExxonMobil (XOM) and Chevron (CVX). The benchmark index's weakest links were Verizon (VZ) and Wal-Mart (WMT), which was downgraded by JPMorgan.
In the commodities complex, crude oil fell 77 cents a barrel, or 0.90%, to $84.81. Gold gained $4.70 a troy ounce, or 0.35%, to $1,364.60.
Wall Street struggled to rally around a pair of acquisition announcements. Echostar (SATS) inked a $1.33 billion to buy broadband satellite network provider Hughes Communications (HUGH) at a 31% premium to its close before buzz of a possible sale broke. General Electric (GE) agreed to scoop up the well support division of the U.K.'s John Wood Group for $2.8 billion in cash.
On the geopolitical front, Egypt's military dissolved its parliament and called for free elections in the next six months after President Hosni Mubarak was ousted amid widespread protests late last week. More protests were planned throughout the Arab world, from Iran and Bahrain to Libya and Yemen. Traders will be watching for signs the turmoil is impacting economic growth or even the stability of key oil-producing nations like Saudi Arabia.
No major companies were hitting the earnings stage, but Wall Street continues to digest the results of yet another successful earnings season. Roughly 75% of S&P 500 companies have released their results and about 70% of them have revealed stronger-than-expected revenue. However, as The Wall Street Journal notes, one-quarter of the companies have disclosed shrinking margins as they deal with rising costs.
CME Group (CMX) is discussing a strategic response to a preliminary merger between NYSE Euronext (NYX) and Deutsche Borse, sources told FOX Business’s Charles Gasparino. Bankers say CME, the parent of the Chicago Mercantile Exchange, may pursue a hostile bid for NYSE Euronext, the parent of the New York Stock Exchange. NYSE Euronext and Deutsche Borse are likely to ink their merger on Tuesday, creating the world’s largest stock market operator, the Journal reported.
Green Mountain Coffee Roasters (GMCR) spiked almost 7% and briefly hit a single-stock circuit breaker as Reuters reported the company has been in ongoing partnership negotiations with coffee giant and rival Starbucks (SBUX). The stock had been down as much as 4% amid concerns about a Starbucks announcement related to the single-cup coffee market.
Wal-Mart (WMT) slumped more than 1.5% after JPMorgan Chase analysts downgraded the retail king to “neutral” from “overweight” and cut its price target to $54 from $59. According to Reuters, JPMorgan said recent checks suggest Wal-Mart lost share in key traffic-driving categories amid inadequate response to heightened competition.
Netflix (NFLX) jumped 7% after Qualcomm (QCOM) said some future Android-powered devices will have the ability to instantly stream TV shows and movies. The devices will be powered by Qualcomm's Snapdragon processors and run on Google's (GOOG) operating system.
The U.K.'s FTSE 100 fell 0.05% to 6060.09, Germany's DAX gained 0.34% to 7396.63 and France's CAC 40 slipped 0.11% to 4096.62.
In Asia, Japan's Nikkei 225 jumped 1.13% to 10725.54, Hong Kong's Hang Seng rallied 1.28% to 23121.06 and China's Shanghai Composite leaped 2.54% to 2899.13.