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Market Recap: Stocks Yahoo Their Way To Green


Stocks Yahoo'd their way to green. But Google weighted on the rest of the tech sector.

The markets received a big surprise from Mister Softie. The Dow Industrials added 92 points, or +0.73% to 12743, the S&P 500 added +16 points, or +1.22% to 1395, and the Nasdaq Composite gained +23 points, or +0.98% to 2413.

Stocks were headed for a lower opening but M&A news between two tech giants caused a run up in stock futures. Microsoft (MSFT) announced early this morning it made a bid for Internet titan Yahoo! (YHOO). Microsoft CEO Steve Ballmer sent a letter to Yahoo's board informing them of the offer for $31 per share representing a 62% premium above yesterday's closing price. The potential deal valued Yahoo! at $44.6 billion. The news sparked a rally in stock futures especially within the tech sector.

"I said into this week's earnings," said Toddo, "and again after I doubled down on the other side of the 10% haircut - that Yahoo would monetize its audience or someone will do it for them. It's better to be lucky than smart and I'm careful not to confuse the two."

Professor Udall chimed in as well. "I expect this deal to be the first of a few more transformative deals in the Tech sector over the next year or longer. This deal could spur this activity as well, while many stocks have gotten just beaten to values that don't make fundamental sense."

Yahoo shares closed up +48% to $28.38. MSFT fell -6.09% to $30.52. Read Toddo's Random Thoughts and Freaky Friday Potpourri.

But stocks took a dip after the Labor Department showed the U.S. lost jobs for the first time more than four years. Nonfarm payrolls came in at -17k far below economist expectations of 70 k. The unemployment rate came in at 4.9% vs. 5.0% consensus. For more, read Professor Depew's Five Things You Need To Know.

Other stocks in the tech sector were taken down by Google (GOOG) which missed analyst expectation yesterday. GOOG fell -7.60% to $516.60. Apple (AAPL) fell -0.83% to $133.71, Research In Motion (RIMM) lost -1.40% to $92.44, and Garmin (GRMN) lost -2.60% to $70.10. For more on the tech sector, read Professor Shedlock's Microsoft Panics, Overpays For Yahoo and Minyanville Editor Andrew Jeffery's Do You Yahoo? Microsoft Does.

Commodities were hit hard today. Crude oil fell -2.79 to 88.96. Gold tumbled -17.30 to 905.40. Silver fell -0.175 to 16.820, and copper fell -1.60 to 327.35.

Professor Lewis offered his thoughts on gold's tumble, "My guess is too many people were long the euro and gold ahead of this jobs data that was, I felt, pretty easy to see would be weak (the January birth/death adjustment is always heavily negative.) Sometimes you get these weird short-term reactions to payroll numbers because of the way people are positioned for them. With that said, they're also usually just a one-day reaction too. This should be great to suck in more shorts for fuel next week."

For more summaries, check out Minyanville's Buzz Bits.

Idea Flow

Below is a recap of some of the idea flow on today's Buzz & Banter. Please note that stocks may appear in both bullish and bearish categories, due to long and short term trades by our many Minyanville professors.

Some bullish trade or investment ideas: SGP, MSFT, MELI, GOOG, INFN, SPX, WWY, CPB, TAP, LM, AMR, BRCM, IFIN, GOOG, Gold, Gold shares

Some bearish trade or investment ideas: NCC, C, GOOG, AEM, GOLD, OSX, ITRI, CRM, GRMN, XLF, GDX

What a week! Go have fun! Enjoy the Super Bowl!
No positions in stocks mentioned.

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