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Tech Stocks Lead a Rebound on M&A Monday

Oil barreled higher on escalating supply concerns

by 5/19/2014 4:17:08 PM
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"Mondays continue to be big for M&A news, as companies seem to be taking advantage of the low-rate environment and higher stock prices," said Schaeffer's Trading Analyst Peter Bryans. "There weren't any major economic data points on the calendar, and people are likely looking ahead to the Federal Open Market Committee (FOMC) meeting minutes, slated for release on Wednesday -- perhaps explaining today's relatively slow trading day." Against this backdrop, the Dow Jones Industrial Average (DJI) stuck close to breakeven, eventually settling with a modest 21-point gain.

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The Dow Jones Industrial Average (DJI - 16,511.86) traded in a relatively narrow range on both sides of breakeven, tacking on 20.6 points, or 0.1%, by the close. Eighteen of the Dow's 30 blue chips resolved to the upside, led by JPMorgan Chase & Co.'s (NYSE:JPM) 1% gain. The Home Depot, Inc. (NYSE:HD) led the declining minority, surrendering 1.1% ahead of earnings.

The S&P 500 Index (SPX - 1,885.08) spent most of the session in the black, advancing 7.2 points, or 0.4%, to settle within a point of its intraday high. The tech-rich Nasdaq Composite (COMP - 4,125.82) fared the best of its peers, adding 35.2 points, or 0.9%, by the close.

The CBOE Volatility Index (VIX - 12.42) ended a wishy-washy session with a loss of 0.02 point, or 0.2%. The market's "fear gauge" has settled six of the past seven sessions beneath the 13 mark.



A Trader's Take:

"Small-caps showed some follow-through from Friday's rally, and a handful of the high-growth names in the Nasdaq bounced back some," noted Bryans. "Meanwhile, the Dow and S&P are still hovering right around their recent all-time highs."

5 Items on Our Radar Today:

  1. AT&T Inc. (NYSE:T) said it will buy DIRECTV (NASDAQ:DTV) for $67.1 billion in cash and stock, or $95 per share. Meanwhile, AstraZeneca plc (ADR) (NYSE:AZN) rebuffed Pfizer Inc.'s (NYSE:PFE) "final" buyout bid. (MarketWatch; Reuters)
  2. Other notable names also appeared on the M&A radar today. Google Inc (NASDAQ:GOOGL) purchased mobile device management startup Divide, while Twitter Inc (NYSE:TWTR) is allegedly considering a bid for audio-sharing service SoundCloud. (Financial Post; Re/code)
  3. Dallas Fed President Richard Fisher, San Francisco Fed President John Williams, and former Fed Chairman Ben Bernanke talked shop in Dallas with former President George W. Bush, with Williams predicting an interest-rate hike sometime next year. Also waxing nostalgic -- whilst promoting a new book -- was former Treasury Secretary Timothy Geithner, who defended the Obama administration's efforts during the housing crisis at a separate event. (MarketWatch; Politico)
  4. Bank of America Corp (NYSE:BAC) options buyers rolled the dice on a solid couple of weeks for the financial concern.
  5. On the flip side, Potash Corp./Saskatchewan (USA) (NYSE:POT) attracted a fresh crop of option bears.

For a look at today's options movers and commodities activity, head to page 2.

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