By Mark Cotton, MarketWatch
Jan 9, 2006
U.S. stocks edged higher in early trading Monday as General Motors Corp.
rallied on a broker upgrade, with investors also focusing on the details
of Boston Scientific's $25 billion bid for medical devices maker Guidant
Corp.
The Dow Jones Industrial Average was up 7 points at 10,966.
The Nasdaq Composite Index was up 2 points at 2,308 while the S&P 500 put
in a fractional gain, up 0.7 point at 1,286.12.
In coming sessions, the market will track fourth-quarter earnings reports.
Dow component Alcoa Inc. will kick off the reporting season with its
report after the close of trade Monday. Analysts expect the aluminum
producer to announce a rise in profits linked to a strong metals market.
In early trading, the stock as up 23 cents at $30.44.
The health of Vice President Dick Cheney also will be monitored. The veep
was admitted to a hospital for shortness of breath may have weighed on
sentiment, but didn't have much of an initial impact on currencies or
stock market futures.
Gold futures pulled back from a 25-year high struck early Monday in
electronic trading. Gold for February delivery was last down $3.70 at
$537.50 an ounce, having earlier peaked at $546 an ounce, its highest
level since 1981. The high gold price is also an indication that many
investors anticipate accelerated inflation.
On the bond market, long-term Treasurys fell ahead of the 3 pm release of
consumer credit data for November. The MarketWatch forecast, based on a
poll of analysts, is for an increase of $3.6 billion, contrasting with a
drop of $7.2 billion in October.
The benchmark 10-year-note last was down 5/32 at 100 26/32 with a yield of
4.39%.
The dollar managed to take back a bit of strength it lost last week
against the euro. In the year-to-date, the dollar has not made the
dramatic progress it registered in 2005, due partly to the perception that
U.S. rate hikes will wrap up soon. There are concerns that changes in
Chinese central bank monetary policy will not support the dollar.
The dollar last was down 0.6% at 114.06 yen, as the euro fell 0.05% to
$1.2085.
In the energy pits, crude-oil futures dipped in early trading. Crude for
February delivery ended down 4 cents at $64.17 in electronic trade. New
York trading starts at 10 a.m. Eastern.
Stocks in play
Shares in Boston Scientific dipped 9 cents to $26.15 after the company
offered up details of its $25 billion bid for fellow medical devices maker
Guidant Corp.. Guidant shares were up 1.7% at $68.50.
General Motors Corp. was the biggest percentage gainer on the Dow
industrials, surging 3.7% to $21.56. The stock, which was a drag on the
Dow in 2005, was upgraded by Goldman Sachs, which said that dwindling
concerns about a possibly bankruptcy should lifted it back to the mid-$20s
by mid-year.
International Business Machines, also in the Dow, fell 1.4% at $83.77. The
stock was downgraded to neutral from overweight at J.P. Morgan, with the
broker citing risks in services and hardware.
Amazon.com dropped 2.2% to $46.82 in early trading. Morgan downgraded
Amazon.com cut its rating on the stock to underweight, citing worries
about U.S. growth.
But there also is some good tech sector news. Cisco Systems advanced 1.%
to $18.98. That share was boosted to an overweight rating by Prudential.
This MarketWatch news update is provided to you courtesy of Thomson
Financial.
This is Thomson Financial's Market Commentary, which is issued three times
daily; Pre-Open ( 9:00 a.m.), Post-Open (10:15 a.m.), and Close (5:00
p.m.). The information herein is believed to be true and accurate. We
take no responsibility for inaccurate information and reserve the right to
update our reports. If you have any questions please e-mail James Sang at
james.sang@tfn.com or call 646.822.6233. For more information about
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SOURCE Thomson Financial Corporate Group
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