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Stocks Seeking Even More Momentum

Bob Pisani is off; this post was written by CNBC producer Robert Hum.

After their best week since November, stocks are looking to extend their current winning streak to five days. Asia jumped 2 percent overnight, while European markets remain fairly flat today.

China’s markets, which reopened following a weeklong break for the Lunar New Year holiday, fell a muted 0.5%. Recall, this was the first day of trading in Shanghai since the Chinese government raised its reserve rate requirements again.

Elsewhere:

Schlumberger formally announced it is acquiring competitor Smith International for $11.3 billion after reports of the deal surfaced Friday morning. Expected to close by the second half of the year, the all-stock deal gives Smith shareholders a 38 percent premium from Thursday’s close.

The merger creates a giant to contend with in the oil services industry. Upon completion of the deal, the new company would have double the revenues of the second biggest company, Halliburton.

On the official announcement, Smith jumps another 9 percent after rising 13 percent on Friday, and Schlumberger falls 5 percent in pre-market trading.

Lowe’s rises 2 percent after its Q4 earnings topped forecasts ($0.14 vs. $0.12 consensus). Same-store sales fell 1.6 percent, but that decline was smaller than expected. CEO Robert Niblock was encouraged by a greater number of “bigger-ticket” purchases.

The home improvement retailer also announced a $5 billion buyback program.

Looking ahead, Q1 guidance falls below estimates ($0.27-$0.29 vs. $0.33 consensus) as comps are seen flat to down 2 percent. However, improvements later in the year allow the firm to raise full-year guidance (inline with Street forecasts) on positive same-store sales for the first time in 4 years.

After lowering its full-year earnings outlook last week, Campbell reported Q2 earnings inline with estimates helped by continue cost cuts and improved margins. The foodmaker saw discouraging declines in soup sales (down 8 percent).

Volumes remained lower, but were partially offset by higher prices. As with other multi-national firms, Campbell’s saw stronger sales overseas (up 12 percent) compared to sales at home in the U.S. (down 5 percent).

GlaxoSmithKline is 2 percent lower on safety concerns of its widely-used diabetes drug, Avandia. A Senate report over the weekend raises concerns that the drug may lead to an elevated heart attack risk, a claim the drugmaker vehemently disputes.

Bank of Ireland falls 6 percent after the Irish government took another 15.7 percent stake (184 million shares) in the bank. The government took control of the additional shares in lieu of a 250 million Euro dividend payment that was due. The Irish government already had a 25 percent stake in the bank via its preferred share holdings.

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CNBC Data Pages:

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CPB
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GSK
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HAL
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BIR
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LOW
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SLW
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SLB
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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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