S&P futures have been steadily rising through most of last night and are now in positive territory. Mubarek is clearly on the outs, there is plenty of uncertainty about successors, but there is now some hope of an orderly transition...and for the moment less chance of instability spreading. Absent news, sideways is the likely course...but it could all change quickly without rapid progress.
That doesn't mean that the source of the current problem—food inflation—is going away. The CRB Index also hit the highest level since October 2008 on Friday. Look for the Egyptian government to expand subsidies of staples.
ExxonMobil opened higher near a two-year high, earnings of $1.85 were above expectations of $1.63, on revenues of $105 billion, also above consensus of $99.1 billion. Global production rose 19 percent, mostly on higher natural gas production (helped by the XTO acquisition). Downstream production (refining) also improved, the crack spread (the difference between the price of crude oil and the products—mostly gasoline—extracted from it) improved with gasoline prices up.
1) Massey Energy jumps more than 10 percent after Alpha Natural Resources agreed to acquire the coal producer for $7.1 billion. The stock and cash deal gives Massey shareholders $69.33 per share (a 21 percent premium)—including $10 in cash and 1.025 shares of Alpha Natural Resources.
Shares of other coal mining companies are rising on the news: Patriot Coal up 4 percent, Arch Coal up 2 percent, Peabody Energy up 2 percent.
2) Illinois Tool Works falls fractionally after missing estimates by a penny despite a strong 9 percent rise in organic revenues. The maker of industrial products saw double-digit sales growth in many of its key segments as a result of "continued positive worldwide macro economic conditions."
Guidance for the current quarter is strong though. Earnings are seen between $0.81-$0.87 (above $0.76 consensus) on revenue growth of 12 percent-15 percent (well above estimates of 10.5 percent).
3) Home Depot rises 2 percent after Goldman Sachs upgraded the Dow stock to buy after raising estimates on hopes for improving comps and margins. That could lead to better stock performance over rival Lowe's . Goldman suggests that "a limited upside to numbers" at Lowe's may be in store due to recent management changes, and it downgrades the stock to neutral.
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