The market opened higher and has traded in a tight range today as numerous headwinds have kept a lid on any momentum the bulls were hoping to gather. All three indexes have made a trip in negative territory but things have turned around as we head into the afternoon as the market is at session highs. Economic news has been better-than-expected which has helped offset geopolitical concerns in Egypt.
The Dow is higher by 49 points to 11,873 while the S&P is up 9 points to 1,285. The Nasdaq is showing a 14 point pop and is at 2,701.
Intel (INTC, $21.19, down $0.26) surprised the market after the company announced it was cutting its first quarter earnings forecast due to a design flaw in one of its chips. The error was found in the recent Intel 6 Series support chip and will cost the company some cash. Intel expects the snafu to reduce revenue by approximately $300 million while the total cost to fix everything is estimated at $700 million.
As far as economic news, the Chicago PMI came in at 68.8 versus expectations for 64.5. Personal income for December showed a 0.4% pop which was in-line while consumer spending increased 0.7% versus calls for a 0.5% jump.
In M&A (merger & acquisition) news, Massey Energy (MEE, $63.14, up $5.91) got a buyout bid from Alpha Natural Resources (ANR, $53.80, down $4.08) for $8.5 billion in a stock and cash deal. The marriage would make Alpha Natural Resources one of the world’s largest producers of “met” coal which is used for making steel. Coal has been white-hot and we look forward to hearing Patriot Coal’s (PCX, $26.48, up $1.02) numbers on Tuesday.
Elsewhere, ProLogis (PLD, $14.87, down $0.34) and AMB Property (AMB, $33.08, up $0.15) announced a merger agreement in a stock-for-stock deal. The combined company will still be called ProLogis and trade under the same ticker symbol. The merger is expected to close in the second quarter.
We like to see the Dow close above 11,900; S&P 1,290 and Nasdaq 2,700 are what we are looking for. Subscribers, check for the trade updates inside the Members Area.