Santa Rally Holding...So Far

While no one is expecting much from this week's trading, geopolitics has again reared its ugly head with the Israel/Hamas conflict. Commodities are rallying, with 6 percent moves in energy commodities, and platinum and palladium up 3 percent and 5 percent, respectively.

Precious metals stocks like Yamana Gold and oil service stocks like Transocean are trading up about 4 percent.

Also on the horizon is India and Pakistan, where Pakistan cancelled army leaves and has shifted troops from its western border with Afghanistan to its eastern border with India.


1) Rohm and Haas down 21 percent pre-open, Dow Chemical down 9 percent, as Kuwait canceled a joint venture with Dow Chemical; Dow was planning to use $9 billion in cash from that deal to buy Rohm and Haas. The Street seems to be betting that this will increase the pressure on Dow to renegotiate its $78 a share cash offer for Rohm and Haas. ROH had been down all last week, closing at $63 and change. It's pre-deal price was $45. Rohm and Haas said completion of the Kuwait deal was not a condition of closing the merger.

What would happen if the deal fell apart? Not clear, but Oppenheimer this morning said Rohm and Haas could trade down to the mid-$20 range.

2) Office REIT SL Green down 4 percent as they cut their dividend almost in half to preserve capital they will need to pay down debt.

3) Dallas Mavericks owner Mark Cuban reported a 9.4 percent stake in Carmike Cinemas. He said the deal was done for investment purposes.

4) Did they make it or not? Still no word from GMAC! They have not said whether they cleared a key financial hurdle to become a bank holding company. They have received approval to become a bank holding company, but the approval was contingent on the auto and home loan provider completing a complicated debt-for-equity exchange by Friday night.

5) The Santa Claus rally, which traditionally occurs in the last five trading days of the year and into the first two days of the new year, is off to a good start: up over 1 percent so far. It didn't work last year, when the S&P dropped 2.5 percent in the same period.

Questions? Comments?