This post is from CNBC producer Robert Hum.
Stocks are starting the week on a positive note, putting both the Dow and S&P at new 52-week highs. This comes despite dollar strength over the past week and a half (U.S. Dollar Index now up over 3 percent from recent low) and lower commodity prices.
Commodities this month:
- Crude oil down 10 percent
- Gasoline down 8 percent
- Silver down 6 percent
- Gold down 5 percent
Despite the energy and materials sectors falling from their highs recently, leadership in techs, industrials, healthcare, as well as both consumer discretionary and consumer staples stocks have remained strong, with those sectors near or at new highs.
While the energy complex shows some signs of weakness (crude oil now below $70 again), airlines continue build momentum following their surge on Friday.
Airlines this month:
UAL up 42 percent
Delta Air Lines up 37 percent
U.S. Airways up 31 percent
AMR up 27 percent
Continental Airlines up 25 percent
Southwest Airlines up 18 percent
1) ExxonMobilagreed to buy natural gas producer XTO Energy for $31 billion in an all-stock deal. The offer pays XTO shareholders a 25 percent premium for their shares based on Friday’s close and will increase ExxonMobil’s exposure to the natural gas exploration and production market. Under the terms of the deal, ExxonMobil will also assume $10 billion in debt.
On the news, XTOsoars 18 percent, while ExxonMobil falls 2 percent and is the laggard on the Dow. Other natural gas stocks are also rising modestly in early trading: Chesapeake Energy up 6 percent, Devon Energy up 5 percent, and EOG Resources up 5 percent.
2) Citigroupis down 5 percent as it formalized its agreement with the Federal Government to repay the bank’s TARP funds by selling $20.5 billion in stock and debt. Additionally, the Treasury will sell $5 billion in its common stock holdings of Citi and then will sell its remaining holdings gradually over the next 6-12 months.
3) Cadburyrejects the hostile bid from Kraft again, and also raised its sales and margin outlook for the next four years as it prepares to mount a strong defense to the current $16 billion offer from the U.S. food maker.
4) Visa is up 4 percent after being upgraded to “outperform” at Robert Baird on higher expectations for earnings revenue growth over the next few years.
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