Wednesday, May 23, 2007

Morning Market Comment

Another morning, another likely higher open as S&P futures show a gain of better than 4 and are high enough above fair value. Whether the market can close on the plus-side remains to be seen, as the last couple of days have featured rally attempts only to see them sputter. Once again, M&A is providing the bulls with plenty of morning ambition:

Now that Alcan (AL) has rejected Aloca (AA), the question is who's the White Knight? BHP in Alcan white knight talks. AL will move a couple of dollars higher this morning.

Here's a deal, but with a small premium: Morgan Stanley to buy Crescent Real Estate

The stride is right for Payless: Stride Rite to be acquired by Payless. Stride Rite (SRR) is up 32% in pre market trading.

Could there actually be interest on the part of some of the Bancrofts in Murdoch's offer? Bancrofts and Murdoch to meet.

Speaking of deals and/or potential deals: Could Daimler Be Takeover Bait?.

There's non-deal news as well:

Cypress Bioscience (CYPB) is up 107%, and Forest Labs (FRX) surging as well: Forest, Cypress Post Preliminary Milnacipran Data. With this news a variety of firms upgraded FRX.

As noted last night, Medtronic beat the street and is up 4% (long here). Piper also upgraded to Outperform.

Other developments to watch:

Other analyst comments of note:

  • Matrix downgrades Advanced Micro (AMD) to strong sell citing loss of market share to Intel (INTC)
  • After earnings last night, Analog (ADI) downgraded to Sell at Merrill
  • Valueclick (VCLK) downgraded to Neutral at Credit Suisse due to valuation

Coming our way at 10:30 the latest energy inventory data - should be interesting in light of yesterday's slide in RBOB.

No economic data again today. Tomorrow the markets will be confronted with Durable Goods, Jobless Claims and New Home sales figures.

Forex - Dollar firm after Lacker comments; 10 year treasury down 1/32nd, yield at 4.835%. Gold is up $3.

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