Investor's Business Daily, May 7th, 2007
The major stock indexes closed mixed Monday on soft volume.
The Dow added 0.4% and the S&P 500 gained 0.3%, according to preliminary figures. The Nasdaq weakened throughout the session and finished just below the breakeven mark, with a 0.1% loss.
Volume was lighter than it had been on Friday as traders look toward Wednesday's Federal Reserve meeting.
Alcan AL saw some of the day's heaviest upside action of a 26.9 billion takeover bid from Alcoa AA. Alcan soared 35% and helped make its Metal Ores industry group, which itself added 2.3%, the day's top performer. IBD's Mining-Gems group held the No. 2 spot with a 2% gain.
The proposed Alcoa-Alcan deal helped buoy other metal stocks including Synalloy SYNL, Alumina Limited AWC and Kaiser Aluminum KALU.
On the downside, Bancolombia CIB slid 1.12 to 26.78 as volume nearly quadrupled. That action left it below its 10-week moving average and 16% short of the all-time high it notched in April. On Monday the bank, which is Colombia's largest, said its first-quarter net income fell from year-ago levels.
3 p.m. update: Blue Chips Head Higher
BY CHRISTINA WISE
The major NYSE indexes have managed to hold on to the morning's gains.
As of 3 p.m., the NYSE composite led with a 0.4% gain. The S&P 500 was up 0.3%, while the Dow had added 0.3%. The gains were less robust on the Nasdaq, where the tech-laden composite was up less than 0.1%.
Volume continued to lag below Friday's levels. NYSE volume was running 15% weaker while Nasdaq trading was 25% slower.
NVE NVEC notched its fifth straight gain, climbing 2.88 to 37.37 on more than three times its usual trade. The stock seems to be working on the right side of a long, steep base. It spent much of March and April trading in a rather tight price range, but has made some large strides upward since its fourth-quarter earnings results beat estimates last week.
Statistical software maker SPSS SPSS tacked on 1.75 to 41.75 on more than two times typical trade. It recently found support at its 10-week moving average. Like NVE, SPSS has been gaining ground since its earnings topped estimates last week. Despite that result, the firm's earnings growth track record has been rather spotty during the past four quarters.
1 p.m. update: Stocks Higher In Slow Trading
By JUAN CARLOS ARANCIBIA
The stock market was higher, although trading was slow and relatively few stocks stood out.
Just past 1 p.m. ET, the S&P 500 and Dow were up 0.2%. The NYSE composite rose 0.3%, while the Nasdaq gained 0.1%.
Midcaps lagged as the S&P 400 was slightly lower. Trading slowed, as the market geared up for a Fed meeting on interest rates on Wednesday. NYSE volume was running 17% weaker while Nasdaq trading was 30% slower.
First Solar FSLR made a new record high, gaining 2.84 to 69.54. Solar energy stocks were mixed in the first half of trading, as SunPower SPWR and Suntech Power Holdings STP reversed lower.
Global Sources GSOL rose 1.07 to 18.82. The stock receded as much as 14% from a 19.10 buy point it cleared April 17. It's rebounded some and is nearing that old buy point in what may be shaping out to be a high handle.
Metals stocks were mostly higher, although a major name gapped down. Tenaris TS lost 2.07 to 45.45 on heavy trading. The stock appeared to be forming a handle in a late-stage base.
Yahoo YHOO fell 0.67 to 30.31 after the Web portal denied rumors it was in merger talks with Microsoft MSFT.
11 a.m. update: The Tin Man Cometh: Possible Alcoa/Alcan Deal Lifts Market
Stocks rose at the open after a hostile, $26.9 billion bid by Alcoa AA for Alcan AL pointed toward further consolidation among metals companies. Takeover talks have perked up lately, with News Corp. vying for Dow Jones and Thomson Financial pursuing Reuters. Dutch banking giant ABN-Amro ABN is also courting multiple suitors.
The NYSE composite, which includes Alcoa and Alcan, was up 0.3% at 10:52 a.m. ET. The Nasdaq, Dow industrials and S&P 500 were all up 0.2%.
NYSE volume was tracing 17% lower than Friday, which was itself a down volume session. Trading volume on the Nasdaq was running 30% lower.
China's Shanghai composite and Tokyo's Nikkei 225 both logged solid days, up 2.2% and 1.6%, respectively. London's FTSE clocked a 1.0% gain.
The Alcoa/Alcan match would create a mega-can maker, the largest player in the aluminum business. Combined revenue of the two companies last year totaled $54 billion. But it's far from a done deal. A statement released by Alcoa Chairman and Chief Executive Alain Belda said that two years of talks failed to produce an agreement. Alcoa shares gapped up, gaining 2.60 to 38.26 on considerable volume. Alcan vaulted 20 points to 81.03 on massive volume.
Other metals-related companies also gained from the news.
Synalloy SYNL gapped up, rising 2.64 to 39.02. A maker of welded pipe and pipeline systems primarily for oil and petrochemical refiners, Synalloy has laid down three straight quarters of triple-digit EPS growth. Sales growth has ranged from 12% to 27%. Shares are currently just below their late April high, after breaking out of a 15-week consolidation in February.
In another merger-related jump, Armor Holdings AH gapped up to gain 4.11 to 86.46 on a third day of huge volume. British heavyweight defense contractor BAE Systems said Monday it would acquire the Jacksonville, Fla.-based military bullet-proofing specialist for $3.5 billion. Armor shares are up 20% since May 2.
Diversified operator Chemed CHE advanced 3.21 to 62.38 on fat volume. The Cincinnati-based operation reported May 1 that Q1 earnings accelerated to 51% on 11% sales growth. The stock was upgraded from to buy from hold by Deutsche Bank early Monday. The move pushed the stock above a left-side high point of a consolidation begun in April 2006.
On the downside, M&F Worldwide MFW gave up some more ground after its recent run-up, losing 2.74 to 60.80. The licorice flavoring maker and check processor had bumped up on news of its pending acquisition of competitor John H. Harland Co. On Friday, M&F reported Q1 earnings slipped 15% year-over-year and that sales grew just 2%. The stock's decline left shares 11% below their April 27 high.
