Stock Market News for December 22, 2009 - Market News
A series of corporate deal announcements and analyst upgrades of two Dow components returned to boost confidence on the Street and sent stocks sharply higher even as a controversial legislation to revamp the U.S. healthcare system inched closer toward finalization.
The mergers and acquisition front witnessed a busy Monday as Bucyrus International (NASDAQ:BUCY) offered to buy the mining operations of Terex Corp. (NYSE:TEX) in a $1.3 billion all-cash deal. Giving healthcare issues a major lift was Sanofi-Aventis’ (NYSE:SNY) announcement to acquire retail health products maker Chattem (NASDAQ:CHTT) in a $1.9 billion deal.
Premarket futures suggest a higher opening on the Wall Street, even as Moody's Investor Services (NYSE:MCO) became the third rating agency to downgrade Greece's government bonds. Dow Jones industrial average futures rose 29, or 0.3 percent, to 10,371. Standard & Poor's 500 index futures rose 3.50, or 0.3 percent, to 1,111.70, while Nasdaq 100 index futures rose 8.00, or 0.4 percent, to 1,833.50.
Meanwhile, a number of analyst upgrades also helped the broader market yesterday. Alcoa Inc. (NYSE:AA), which entered into a $10.8 billion deal with the Saudi Arabian Mining Co. to develop a major mining operation, jumped 7.9% after Morgan Stanley (NYSE:MS) lifted the stock to “overweight." Morgan Stanley (NYSE:MS) said it sees a tight market for aluminum pricing “well into 2010." The analyst increased the earnings estimate to 75 cents from 50 cents and the price target to $22.
Goldman Sachs (NYSE:GS) added to the upbeat sentiment as it recommended shares of Mosaic (NYSE:MOS), and added Potash (NYSE:POT) to its Conviction Buy List, on positive outlook for fertilizer prices.
Barclays Capital (NYSE:BCS) upgraded shares of Intel (NASDAQ:INTC) to "overweight" from "market weight," basing its decision on "seemingly solid end market conditions, an upward bias to estimates and intriguing valuation." Intel shares advanced 2.3%.
On Monday, the Dow Jones industrial average advanced 85 points, or 0.8%, to 10,414.14. The Dow average is now up 0.7% for December. The S&P 500 index climbed 11 points, or 1.1%, to 1,114.05. The Nasdaq composite advanced 26 points, or 1.2%, to 2,237.66, its highest level since September 2008. Volume was down to a modest 1.013 billion shares, with advancing issues ahead of decliners by a five-to-one margin. The dollar advanced 0.4% to 78.10 against a basket of currencies.
The difference between yields of the 2- and 10- year notes widened to a record divide as the yield on the 2-year rose 8 bps to 0.87%, while it rise 15 bps on the 10-year to 3.69%.
Healthcare stocks, which have been among the laggards this year, advanced 1.1% yesterday. As the final revisions of the $871 billion reform package took shape and the bill appeared headed for a final, Thursday vote, investors viewed the sector with increased confidence. Aetna (NYSE:AET) gained 4.7%, Cigna (NYSE:CI) advanced 3.9%, Humana (NYSE:HUM) rose 3.5%, and WellPoint (NYSE:WLP) closed up 2.9%.
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