1:50pm (EST)
Futures were weak for much of last night and throughout the morning which lead to a lower open to start today’s session. Much of the weakness has been due to the water cooler talk of a pending default on Greece’s debt, although their Prime Minister stated his country would not default. Meanwhile, the unexpected resignation of Japan’s new trade minister has Wall Street wondering about the pace of the country’s post-earthquake/tsunami recovery. Here at home, the President spoke from the rose garden and said he was sending his American Jobs Acts bill to Congress today.
The Dow opened with a triple digit loss, rebounded, but is currently showing a decline of 117 points to 10,874. The S&P 500 is down a dozen points and is at 1,142 but has traded in positive territory, suggesting the losses could be contained today.
The Nasdaq is lower by 14 points to 2,454 but has traded to a high of 2,486.
We mentioned support and resistance this morning and the market appears to have factored much of the Greece news into today’s session which means we could bounce in the finally hour of trading.
Tech stocks are getting cheap which means we could start to see more M&A deals. In fact, Broadcom (BRCM, $32.42, down $1.02) has been talking to NetLogic Microsystems (NETL, $48.05, up $16.14) for awhile and finally agreed to buy the company for $3.7 billion, or $50 per share.
The deal represents a premium of 57% to NetLogic’s closing price of $31.91 on Friday but the stock had traded in the $40’s for much of the year. In May, shares hit a high of $43.71 so Broadcom wanted to scoop them up before they recovered which would have meant a higher bid. The deal, which was approved by both boards, is expected to close in the first half of 2012.
We have a few trade updates to go over and we are close to adding new trades. Subscribers, check the Members Area for the updates. Pay attention to the Watch List as we may release a trade today in the final hour if the price is right.
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