U.S. MARKET AVERAGES
The stock markets have very little changed their trading fashion since the beginning of Monday session. The morning dealings have been within narrow ranges with the major averages posting only modest gains.
Stocks have been largely driven by merger and acquisition deals and declining oil prices. The merger news brought positive sentiment to the market as traders believe that consolidation is a sign of corporate confidence in the economic outlook.
A considerable contribution to the market stability was provided by the tech sector, rising up 0.6% on a series of M&A news. The business software Oracle is acquiring its rival Siebel Systems; the online auctioneer eBay is buying Skype Technologies and the financial services company Wachovia Corp. is acquiring the automobile finance company Westcorp.
The leading gainers of the morning session were the software sector, rising 1% and the computer hardware space , climbing higher by 1%. The airline sector rallied recently, posting advance of 1%, although it started below the flat level.
Oil prices put their stamp on the market falling below $63 a barrel on signs of slowdown in global demand growth and dragged the energy sector down to make it the worst performer, down 1.7%.
Gold sector notably declined 1%.
Several stocks like GTECK (
GTK: chart), Corning (
GLW: chart), and Agilent (
A: chart) posted considerable gains.
Delta (
DAL: chart) and OSI Pharmaceuticals (
OSIP: chart) were among the declining stocks.
MOVERS AND SHAKERS
Siebel Systems (
SEBL: chart) advanced 13.5% after
Oracle Corp. (
ORCL: chart) said it would buy the company for $3.6 billion. Oracle lost 1.3% while its German competitor
SAP (
SAP: chart) gain 0.65%.
eBay Inc. (
EBAY: chart) dropped 0.9% after it agreed to aquire Skype Technologies SA for $2.6 billion in cash and stock and up to $1.5 billion in incentives.
Wachovia Corp. (
WB: chart) could gain in early dealings due to its $3.91 billion stock acquistion of
Westcorp (
WES: chart) that would increase earnings in the second year after the purchase. Westcorp owns 84% of
WFS Financial (
WFSI: chart) and Wachovia bought the rest 16% of the company. Wachovia jumped 0.55%, Westcorp was up 0.75% while WFS Financial climbed 0.15%.
Delta Air Lines (
DAL: chart) was down 23% due to the rumours about a bankruptcy protection as early as Thursday.
Northwest Airlines Corp. (
NWAC: chart) are expected to rise after the company ended talks with its striking mechanics on Sunday without an agreement. The company lost 4 cents on Friday.
Citigroup Inc. (
C: chart) was 1.4% higher after the bank was upgraded to overweight from neutral by Prudential.
ECONOMIC NEWS
No major economic news is expected today.
INTERNATIONAL MARKET NEWS
Asian-Pacific benchmarks closed the trading session in the positive territory with the Nikkei rising to a new four-year high of 1.6% after the general election victory of Prime Minister Junichiro Koizumi’s LDP and on better-than-anticipated GDP data. In the regional markets, South Korea’s Kospi rose 0.5%, Singapore Strait Times gained 0.75%, and Hong Kong’s Hang Seng added 0.2%. In currency markets the dollar bought 109.78 yen.
European stocks closed mixed on falling oil prices, weak euro and deal news from the insurance and utility sector. The focus was on the German companies and policy because of the approaching general elections in the country. The German DAX 30 lost 0.3%, the French CAC 40 finished flat, and London’s FTSE 100 advanced 0.3%.
ENERGY, METALS, CURRENCIES
Oil prices tumbled below $63 a barrel on signs of slowdown in global demand growth. Light sweet crude October delivery slid $1.23 to $62.85 a barrel. London Brent dropped $1.24 to $61.60.
