M&A Activity Helps Bulls Push Resistance

1:00pm (EST)

The bulls have continued last week’s late push on merger-and-acquisition (M&A) news which has helped push the major indexes back towards resistance. The market is off its session highs but only slightly despite some nasty housing numbers. Existing home sales for February came in at 4.88 million units, which was less than the 5.05 million that had been expected.

The news was released shortly after the market opened but the bulls ignored it and have even pushed the Homebuilding sector higher today. KB Home (KB, $13.31, up $0.22), which reports earnings this Friday, and Lennar (LEN, $19.79, up $0.12) have come off their highs but are seeing some action.

As far as M&A news, AT&T (T, $28.37, up $0.43) and Deutsche Telekom AG got the ball rolling early as they announced a $39 billion, cash-and-stock deal on Sunday in which AT&T will acquire T-Mobile from the company. In return, Deutsche Telekom will now own 8% of AT&T but the merger could face some headwinds with regulatory approval which is expected to take up to a year.

Elsewhere, Charles Schwab (SCHW, $17.44, down $0.11) has agreed to buy optionsXpress (OXPS, $17.70, up $2.37) for $1 billion as Chuck looks to expand his company’s options. Schwab will pay a little over 1 share of its common stock for each share of optionsXpress stock which, based on Friday’s closing price, gets the bid up to $17.91. Both brokerage firms will initially retain their separate brand identities and the deal is expected to close in the third quarter.

As far as the market, things are also looking up although the bulls need to close above resistance to keep the momentum going this week.

The Dow is up triple-digits, or 182 points, to 12,040 while the S&P 500 is higher by 19 points to 1,298. We are looking for a close above 12,000 for the Dow and 1,300 for the S&P. The Nasdaq is showing a 48 point gain and is at 2,691. The index has traded up to 2,699.70 but has once again failed to clear 2,700.

We have a lot to cover in our Members Area today, including a NEW TRADE! We think we have found a “safe” trade that should do well through this market volatility as shares continue to set new 52-week highs.

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M&A Activity Helps Bulls Push Resistance

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