9:10am (EST)
The market struggled with direction yesterday and ended mixed as both the bulls and bears seemed content staying on the sidelines. There wasn’t a whole lot of news to get either side excited as Ben Bernanke’s speech was the highlight of the day.
We had mentioned Big Ben was making a cameo at the Economic Club of Washington D.C. and he indicated that the FOMC is looking to keep interest rates low for an extended period of time. Bernanke comments were consistent with the Fed’s previous statements, and it helped ease concerns that the Fed would raise rates after a better-than-expected November jobs number on Friday.
As a result, the Dow managed to squeeze out a one-point gain and closed at 10,390 after hitting a high of 10,443. The S&P 500 finished with a 2 point loss and closed at 1,103 while the Nasdaq fell 5 points and settled at 2,189.
We had mentioned that our near-term targets were Dow 10,800, Nasdaq 2,275 and for the S&P 500 we have 1,150 penciled in.
Over the past few weeks, the market has been unable to extend its recent highs and seems to be “rolling over” once we bump up near these resistance levels. This morning isn’t helping as the futures are significantly lower as we head towards the opening bell.
Dow futures are down 79 to 10,312, Nasdaq futures are off 14 to 1,770 while the S&P 500 futures are lower by 9 to 1,095.
AutoZone (AZO, $153.36, up $1.28) said 1Q profit nearly 10%, as consumers spent more on repairs for their old cars rather than buying new ones.
The company earned $143 million, or $2.82 a share, versus $131 million, or $2.23 a share, in the same period last year. Wall Street was expecting $2.66 a share. Revenue came in at $1.6 billion or right in line with expectations. Shares are showing an “ask” of $154.30 in pre-market trading.
Celgene (CELG, $55.53) is taking a hit this morning after saying it would buy privately held Gloucester Pharmaceuticals for $640 million. The deal includes $340 million upfront and $300 million in future milestone payments. Gloucester has a sweet pipeline and the deal gives Celgene access to some potentially powerful cancer drugs.
As the case with most buyouts, Celgene is lower in pre-market trading after announcing the merger. The stock is down $2.53, to $53.00 ahead of the bell. From the charts, Celgene recently broke out from its October resistance of $56.50 and looked headed towards challenging its 52-week high of $58. We may use today’s weakness to establish a small position in some latter month call options…
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