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HAVING TROUBLE PRINTING?
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A New Beginning for 2005?

The major equity averages soared higher Monday amid a
slew of favorable events including a blockbuster technology
merger, a successful election in a Iraq, and a retreat in oil
prices.

Stocks on the Dow Industrial Average were boosted by
reports that SBC Communications (NYSE:SBC) has
reached an agreement to acquire its former parent AT&T
(NYSE:T) in a $16 billion deal that could make SBC the
largest source of landline and wireless communications
services for homes and businesses with $90 billion in
annual revenues. The merger package for the leading
long-distance carrier includes $14.7 billion in SBC stock
and a special cash dividend of over $1 billion to be paid
by AT&T to its current shareholders when the acquisition
closes.

A number of other deals were in the works including an
offer by Eastman Kodak (NYSE:EK) to purchase Creo
(NASDAQ:CREO), a Vancouver supplier of commercial
printer systems, for $980 million in cash. At the same
time, Metlife (NYSE:MET) said it will acquire Citigroup's
(NYSE:C) Travelers Life & Annuity Company for $11.5
billion and, in future deal, Time Warner (NYSE:TWX) and
Comcast (NASDAQ:CMCSK) are reportedly going to bid
nearly $15 billion to purchase the bankrupt cable operator
Adelphia Communications.

In the technology segment, semiconductor and retail
shares were among the best performers while airlines,
retailers and banks led the advance in broader market
sectors. Housing stocks were in negative territory after
a report said new home sales increased only 0.1% to a
seasonally adjusted annual rate of 1.098 million units for
the month of December. Experts were hoping for a small
rebound in sales to about 1.18 million.

Other financial markets were mixed. Crude oil prices
declined after the Organization of Petroleum Exporting
Countries decided to leave production quotas unchanged.
Crude for March delivery retreated $0.68 to $46.50 in
morning trading on the New York Mercantile Exchange.
Uninspiring Japanese data and comments from Chinese
officials at a world economic forum helped the dollar move
higher while Gold retreated for a third straight session amid
renewed strength in the greenback. Treasury prices traded
lower in the wake of positive economic data. The 10-year
note was last down 6/32 at 100 22/32, yielding 4.14%.

Despite the widespread advance in equities, analysts
noted that the popular stock indices will still post a loss
for the month of January. Based on that result, historical
data suggests the market might have difficulty achieving
gains in the coming year. This belief stems from the
so-called "January barometer," an axiom that implies
January is a bellwether for the entire year. In roughly nine
out of every ten years since 1950, the market has declined
when the Standard & Poor's 500 index finished the first
month in negative territory.

Only time will tell...

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