Minyanville's Market Recap: M&A Mondaaays, Stocks Fall Flat
It was a case of the M&A Mondaaays. We had low volume because of Columbus Day and the bond markets were closed. SAP's big merger failed to give any boost to the markets.
Stocks ended the day flat with the Dow Industrials falling -0.16% to 14,043, the S&P 500 losing -0.32% to close at 1,552, and the Nasdaq Composite edging higher to 2,787 for a gain of +0.25%.
It was a case of the M&A Mondays this morning as SAP (SAP) announced its largest acquisition in its 35-year history by acquiring Business Objects (BOBJ) for $6.8 bln. SAP shares dropped as it added that the transaction would not produce a profit until 2009. The news caused some sparks in the tech sector prompting a number of professors to make moves. Professor Udall stated that the M&A activity prompted him to put Spansion (SPSN) on his bullish radar. The news also allowed Professor Katz to short Cognos Incorporated (COGN) as he reasoned, "I think the odds are much greater that SAP and Oracle (ORCL) will squeeze the business intelligence pure plays (Microstrategy (MSTR) and Cognos (COGN)) than for a company to come out and acquire COGN at these levels.
Other top techs performed brilliantly today. Research in Motion (RIMM) gained another +3.6% on the day to close at $117.57. Apple (AAPL) gained another $6 to finish up +3.8% to $167.70. The performance helped push the Morgan Stanley Technology Index (MSH) up to a new all-time high at 683.07 before closing at 682.94 for a +0.56% gain.
Financials were laggy as Toddo noted on the Buzz. Bear Stearns (BSC) led the large investment banks to the downside falling -3.75%, Morgan Stanley (MS) fell -1.4%, and Lehman Brothers (LEH) fell -1.8%. Toddo said to respect the price action by noting "a dynamic that demanded attention in the face of fugly news from Citigroup (C), UBS (UBS), Washing Mutual (WM), and Merril Lynch (MER) – we've arrived at the mirror image of the August scrimmage. Click here to read more in Monday Morning Quarterback. Also click here to read Minyan Peter's Bank Data Reveals Stretched System.
Commodities were materially weaker today. Crude oil fell -2.7% to $78.96 and gold fell 1.15% to $738.60. Professor Lewis reaffirmed his bullish position on the Buzz by saying "It's nothing new really. Gold just appears to be moving sideways around the May 2006 peak ($730 spot), while gold shares indices are doing the same thing around their May 2006 peaks, just correcting before the next leg up, in my opinion."
Click here for more summaries that occurred on the Buzz & Banter in our column, Buzz Bits. Also get another look at today's trading in Professor Tuttle's Winners & Sinner.
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: DYN, RIG, CYD, YHOO, MCD, YHOO, VMW, MSFT, BRCM, BZP, INTC, AAPL, GOOG, IBM, MSFT, QCOM, LULU, GLW, NILE, SDSN, CTDC, NDN, YUM, AKAM Puts (Protection)
Some bearish trade or investment ideas: R, MA, COGN, ARO, PDS, CHA
Investors will be watching the FOMC minutes released tomorrow morning at 2:00 PM EST. Also, earnings season kicks off tomorrow after the bell with Alcoa (AA). Click here to see the rest of the weekly radar.
Hope the markets didn't put you to sleep for much of the day. Have a great night!
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