By Leslie Wines, MarketWatch
Dec 23, 2005
U.S. stocks opened higher Friday, with trade enlivened by merger news,
including a raised $4.2 billion bid from European steelmaker Arcelor for
Canada's Dofasco and a $1.6 billion agreement for Apax Partners to buy Tommy
Hilfiger.
Volume is likely to be light during the final session before Christmas
weekend.
The Dow Jones Industrial Average was up 5.76 points at 10,895.20.
The S&P 500 was up 0.48 point at 1,268.60 and the Nasdaq Composite up 4.02
points at 2,250.51.
On Thursday stocks closed at their best levels of the session, aided by
data showing tame inflation, prompting optimists to conclude that the vigorous
year-end rally seen in November has resumed.
"The Santa Claus rally is clearly underway. I expect to see the bulls
carry the averages to new four-and-a-half year highs right into next Friday's
close," said Marc Pado, U.S. market strategist at Cantor Fitzgerald.
"Window dressing should focus on the groups that have done well this
year." Pado said.
"Energy, technology, financials, and industrials have provided
leadership," Pado said. "Even those groups that have underperformed for the
year have picked up quite a bit in the last quarter."
However, other analysts consider market direction uncertain and are
cautioning investors against making bold moves between now and the end of the
year.
The Commerce Department said that new orders for U.S.-made durable goods
increased 4.4% in November to a record high level of $223 billion, pushed
higher by aircraft orders.
The gain in overall November orders was much larger than expected.
Economists were expecting orders to rise 1.5%, according to a survey conducted
by MarketWatch.
The University of Michigan's December consumer sentiment survey came in
with a reading of 91.5. The MarketWatch forecast, based on a poll of
economists, was for an unchanged reading of 88.7.
New home sales numbers for November are due at 10 a.m. MarketWatch
predicts sales of 1.31 million units.
Crude futures were well below the psychologically critical $60 a barrel
level. The front-month contract last was down 45 cents at $57.83 a barrel.
Gold futures moved higher, trading up $1 at $506 an ounce. Analysts expect
the contract to hover near $500 an ounce for the remainder of the year, then
test the $600 level in 2006.
The dollar shot higher after the news of the much bigger-than-expected
jump in durable goods orders, rising 0.8% to 116.74 yen. The euro last was
down 0.03% at $1.1843.
The Treasury market strengthened after the durable goods report as
investors there focused on the durable goods total excluding the orders for
aircraft - rather than focusing on the robust headline figure.
Excluding aircraft and other transportation orders, durable good orders
fell 0.6% in November, the third straight monthly drop.
However, Treasurys later weakened as the University of Michigan sentiment
survey proved to be strong.
The 10-year benchmark note last was down 4/32 at 100-14/32 with a yield of
4.446%.
Stocks in action
Shares of Albertson's caved in 13.4% to $20.14 after a deal to buy the
struggling supermarket operator fell apart.
Shares of Tommy Hilfiger were down 3 cents at $15.97 after the news
private equity firm Apax Partners will buy it. Tommy Hilfiger put itself up
for sale earlier in the year.
Steel stocks were in focus after the news that Arcelor's $4.2 billion
raised offer for Dofasco topped an offer from Germany's ThyssenKrupp.
The ThyssenKrupp bid was unanimously recommended by the Dofasco board.
Among steel shares that trade in the U.S., Nucor was 32 cents higher at
$67.56, Mittal Steel up 6 cents at $26.22, and U.S. Steel up 1.7% at $47.35.
In other merger news, The Wall Street Journal reported that buyout firm
Bain Capital is in talks to buy the sensors and controls business of Texas
Instruments.
Texas Instruments stock was up 1% at $33.10.
This MarketWatch update is provided 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 Thomson
Financial visit us on-line at http://www.thomsonfinancial.com. For more
financial information at your fingertips, please visit
http://www.irchannel.com.
SOURCE Thomson Financial Corporate Group
back to top
