Texas Instruments (TXN) Acquiring National Semiconductor (NSM)

9:00am (EST)

We were hoping for a little more momentum on Monday following last week’s push to the top of resistance, but the market was choppy all day and stayed in a tight range to end mixed.

The bulls were hoping Ben Bernanke would provide a spark but he was tight-lipped and did not make any comments on the Fed’s $600 billion government bond-purchase program. We were hoping he would at least say something about the U.S. economy in his speech but not a word was mentioned about the 8.8% unemployment rate or the 216,000 jobs that were added.

Despite the lack of backup, the bulls managed to make a small push higher without giving up ground which was a good sign.

The Dow managed to close at a 52-week high by adding 23 points and finished at 12,400. It was the blue-chips first close above 12,400 since June 2008. Our near-term target remains 12,500-12,600 while support comes in at 12,200.

The S&P 500 was up a half-point and settled at 1,332.87 but faced resistance at 1,334 which represents a double off the March 2009 low. The index traded as high as 1,336 but we are watching this level carefully for clues on a push to 1,350. Support is at 1,325 so we are right in the middle of a breakout or breakdown.

The Nasdaq failed to clear and close above 2,800 again and ended with a half-point loss at 2,789. Our near-term target remains 2,850 but Tech is struggling.

After the bell yesterday, Texas Instruments (TXN, $34.11, down $0.12) said it would be acquiring National Semiconductor (NSM, $14.07, down $0.16) for $6.5 billion, or $25 a share. The deal is one of the industry’s largest in years and could lead to further consolidation. Shares of NSM closed at $24.30 in after-hours trading and nets shareholders a 75% premium versus Monday’s closing price.

Other chips stocks rallied in extended trading; Nvidia (NVDA, $17.55, down $0.65) was up 45 cents to $18 while Broadcom (BRCM, $38.08, down $0.28) was also higher by 2.5% to $39.02.

Despite the M&A news, futures are pointing towards a lower open. Dow futures are down 23 points to 12,314 while the S&P 500 futures are lower by 4 points to 1,325. The Nasdaq 100 futures are showing a decline of 15 points and are at 2,326.

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Texas Instruments (TXN) Acquiring National Semiconductor (NSM)

CFTC Disclosure: