By Mark Cotton, MarketWatch
Dec 12, 2005
U.S. stocks gained ground in early trading Monday, buoyed by a possible
$30 billion ConocoPhillips acquisition of Burlington Resources, and positive
broker comment on Google Inc. and United Technologies.
The Dow Jones Industrial Average rose as high as 10,811.23 out of the
gate. The benchmark index was last up 21 points at 10,800.
The Nasdaq Composite Index rose 8 points to 2,264.85 while the S&P 500
Index gained 3.5 points to 1,263.
"I think we're going to have a strong week," said Barry Hyman, equity
market strategist at Ehrenkrantz King Nussbaum. "We should trend higher after
five days of consolidation."
"Once we get the FOMC out of the way, the economic numbers should reflect
a vibrant economy."
The Federal Open Market Committee meets on Tuesday to discuss interest
rates. It is widely expected to raise its key short-term rate by a quarter
percentage point to 4.25%.
November retail sales, consumer price data and a number of regional
manufacturing reports are due out later in the week.
On the broader market for equities, advancers outpaced decliners by more
than 2 to 1 on the New York Stock Exchange, and by narrower 15 to 8 score on
the Nasdaq.
Dollar, gold, oil, bonds
On the currency markets, a broadly lower dollar fell to its weakest since
Nov. 7 against the euro, as dollar bulls grew jittery ahead of a Federal
Reserve meeting Tuesday that could result in a signal for the end of the
central bank's rate-hiking campaign.
"With potential for signals from the Fed that its tightening program may
be coming to an end, and prospects for continued ugliness on the trade and
current account front, risk for the greenback appears to be on the downside
this week," said analysts at Action Economics.
The euro was up 1.1% at $1.1947. Against the yen, the dollar fell 0.5% to
120.02.
Gold futures surged as much as $14 an ounce in early trading, gaining for
an eighth consecutive session, amid fresh reports of investment fund demand in
Asia and the Middle East.
Gold for February delivery was last up $6.50 at $536.70 an ounce.
Crude-oil futures edged higher in early trading after the Organization of
Petroleum Exporting Countries said it will leave unchanged its output quota of
28 million barrels of oil a day, but warned it may tighten the spigot, at a
special meeting in January, if demand falls too much.
An explosion at British oil storage depot over the weekend also
underpinned gains. Crude for January delivery ended up 76 cents at $60.15 a
barrel in electronic trading. New York trading starts at 10 a.m. Eastern.
Bonds were little changed in early trading. The benchmark 10-year note was
up 1/32 at 99 25/32, with its yield at 4.5%.
ConocoPhillips eyes Burlington Resources
Continuing the oil theme, ConocoPhillips shares fell as much as 3.3% to
$60.95 on a Wall Street Journal report it is negotiations to buy oil and gas
producer Burlington Resources Inc. for more than $30 billion. Burlington's
stock shot up 9.2% to $83.05.
Also on the deal front, Viacom's Inc.'s Paramount Pictures sealed a deal
to buy DreamWorks SKG for $1.6 billion, thwarting rival NBC-Universal's five-
month long courtship to acquire the independent movie studio. Viacom shares
rose 28 cents to $34.69.
Tommy Hilfiger Corp. has received takeover interest from three groups, the
Wall Street Journal also reported. The stock was up 30 cents at $18.20 in
early trading.
Wal-Mart Stores Inc. tacked on 33 cents to $48.41 after it reiterated that
it expects same-store sales to rise between 2% and 4% in December.
Broker Calls
Shares in United Technologies rose 47 cents to $55.89 after broker Morgan
Stanley upgraded the company to overweight from equal-weight, saying the
conglomerate is not getting the recognition it deserves for the aerospace
cycle.
Google shares climbed $4.52 to $413.72 after Credit Suisse First Boston
lifted its price target to $475 from $400, saying the momentum behind the
online advertising market is accelerating.
The Internet search company may also be lifted by news that it will join
the Nasdaq 100 index when the closely-followed technology benchmark is
rebalanced this month.
This MarketWatch news update is provided to you courtesy of Thomson
Financial.
This is Thomson Financial's Market Commentary, which is issued three times
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The information herein is believed to be true and accurate. We take no
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SOURCE Thomson Financial Corporate Group
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