Two Ways: Sun Burned... By IBM
Strengthen your portfolio in good times and bad.
Talks between IBM (IBM) and Sun Microsystems (JAVA) are completely breaking down, threatening a $7 billion acquisition. According to the Wall Street Journal, IBM withdrew its offer to purchase Sun over the weekend after executives there formally rejected the deal. Although both parties are still in talks by telephone, Sun's board believes IBM's offer gives it too much leeway to walk away from a deal. Initially, Sun accepted a takeover price of $9.55 per share -- about $1 lower than expected -- if IBM promised to proceed with the transaction even in the faces of forced divestitures by regulators.
Sun shares are down 26% to $6.30 in pre-market trading.
From the Bull Pen: IBM is the leader in tech. Bulls can take advantage of its weakness, fading (read: buying) the stock into gapfill near $98.
From the Bear Cave: For tech bears, one might look to Apple (AAPL). It's at the top of its Bollinger Band and hasn't reached its 200 DMA since last fall. One can set a buy stop near $117.
Quick Check Around the World
Asian trading closed with the Hang Seng 3.11%, India 1.80%, Nikkei 1.24%, and Taiwan 0.48%.
Glancing towards Europe, we see the CAC 1.11%, DAX 1.07%, FTSE 0.96%
As of 8:00 AM EST, S&P Futures are trading -4.00 to 837.00, and Nasdaq futures are -7.00 to 1307.00.
A Look at Commodities
Over in commodities, crude oil is trading +0.37 to 52.88 while gold is down -16.6 to 880.70 this morning. Silver is -0.315 to 12.42, and copper +0.05 to 200.10.
The dollar index is -0.10 to 84.4550.
No events on the radar today but take note of Alcoa (AA) kicking off earnings season Tuesday afternoon, so click here for the full trading radar.
Welcome back, Minyans. Good luck and have a great day.
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