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Jul.23

8:47 AM ET

Monday, 23 Jul 2007

CNBC's Domm: Today's Agenda in the Markets

Posted By:Patti Domm

Sectors:Media | Technology | Basic Resources | Retail

A swirl of merger activity and blow-away earnings from Dow component Merck are positives for stocks ahead of the opening. European markets are mostly higher and Asia was mixed overnight.

Merck [MRK Loading... () ] said this morning it earned $1.68 billion in the second quarter and it raised its forecast for the year on strong demand for its medicines. The company's earnings per share of 77 cents a share topped analysts' forecasts of 72 cents a share.

Merger Monday

The two largest offshore oil and gas drillers, Transocean [RIG Loading... () ] and GlobalSantaFe, [GSF Loading... () ] announced a plan to merge in a gigantic deal.

Cerberus is buying United Rentals [URI Loading... () ] for $6.6 billion.

In ongoing sagas, the Bancroft family meets today in Boston to discuss the News Corp.'s [NWS Loading... () ] $5 billion bid for Dow Jones [DJ Loading... () ]. Barclays raised its offer for ABN Amro to $93.4 billion after lining up investments from China and Singapore.

Back-to-School

Wal-Mart [WMT Loading... () ] said it will cut prices on 16,000 items this week, mainly on back-to-school items. The retailer made a similar price play at the start of the holiday shopping season last fall. Wal-Mart says it will also start an ad campaign to emphasize to consumers the importance of savings as high gasoline prices pinch during the shopping season.

Keeping America Great

The latest survey from National Association for Business Economics is pretty good, says CNBC's senior economic correspondent Steve Liesman. The survey was released today and looks ahead at business prospects for the rest of the year.

It shows "housing won't tank the economy, and employment and cap-ex intentions are strong," Liesman says. The survey also says business prospects improved since the start of the year, but companies are still facing shortages of skilled employees.

After dipping below 5% last week, the yield on the 10-year [US.10 Loading... () ] this morning was at 4.95%.

CNBC.com's Ariel Nelson crunched some data on the 10-year's move. He found that since 1987, the Dow was lower 55% of the time one month after the 10-year yield crossed under 5%. But after three months the Dow was higher 64% of the time and after six months, it was higher 55% of the time.

Birinyi Research last week did a study on whether the market is overextended. The S&P 500 was recently 25% higher year over year. The report said that this is not an unprecedented event even within the current bull market and that these types of highs do not signal the end of a bull market.

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