Monday is shaping up to be a quiet session. The rally has paused to catch its breath after last week's sprint higher. The U.S. dollar is trading close to unchanged with little affect on commodities. Crude oil is near $81.40 a barrel while gold futures are just under $1,125 an ounce. The lack of economic data has left investors to focus on individual stories like MCD, AIG and President Obama's latest push on healthcare reform.
Foreign markets were mixed. Asian stocks were still in rally mode as investors across the Pacific got a chance to react to Friday's jobs report here in the states. The Chinese Shanghai index rose 0.7%. The Hong Kong Hang Seng surged 1.9%. The Japanese NIKKEI rallied 2.0%. It was a different story in Europe. After a weeklong rally stocks oscillated sideways on either side of unchanged. Financials and drug stocks were a drag on the rest of the market. British firm AstraZeneca (AZN) said its cancer drug Recentin failed in its latest trial. At day's end the English FTSE index gained 0.12%. The French CAC-40 lost 0.18%. The German DAX closed at -0.02%.
Here in the states shares of McDonald's (MCD) were higher after the company said same-store sales surged 4.8% in February. Analysts were only expecting +3.9% growth. Same store sales in the U.S. only rose 0.6% but in Europe they rose 5.4% and in the Asia/Pacific, Middle East, and Africa regions they rose 10.5%. MCD is still up 2.8% on the session and nearing significant resistance in the $66 area.
Shares of AIG are also trading higher after the company announced it was selling its American Life Insurance Co. (also known as Alico) to rival MetLife for $15.5 billion. This is the second major sale of assets by AIG in the last 30 days as the company tries to pay back its debt to the U.S. government. Shares of AIG are up 3.8% but they're struggling with resistance near $30.00 and its 200-dma directly overhead.
Meanwhile in Australia the M&A activity continues. Arrow Energy said that Royal Dutch Shell and PetroChina put together an offer to buy Arrow for about $3 billion. Arrow owns significant natural gas assets in Australia and Shell already owns 10% of Arrow's business outside of Australia. This news has not had much affect on the energy sector here in the U.S.
Overall stocks are quiet with the S&P trading in a very narrow range near the 1140 level. You could argue that the lack of profit taking is a good sign. Odds are stocks will drift higher in the absence of any big economic news this week but they look a little overbought and due for a dip. The NASDAQ is showing a little more strength with a new 52-week high over the 2330 level. The DJIA is drifting sideways. The small cap Russell 2000 is also trying to extend its gains with a 0.2% move and a new 52-week high.
Chart of the S&P 500:
Chart of the NASDAQ:
Chart of the Dow Industrials:
Chart of the Russell 2000 index: