Daily Market Summary 1/30/07

[Portfolio Crafter]

End of Day Market Summary Tuesday, January 30, 2007
by Portfolio Crafter
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Stocks finished mixed after investors behaved cautiously in the face of sliding crude oil prices, a flurry of merger developments, and technology innovations from chip-making companies Intel Corp. and IBM. This is a heavy week with lots of earnings, economic data, and the Federal Reserve meeting. Any of these can move the market, so it is likely to remain choppy until investors can get a grip on the overall picture."

Today, the Dow Jones Industrial average closed up 3.76 or 0.03% to 12,490.78, the broader S&P 500 closed down 1.56 or 0.11% to 1,420.62, and the tech-heavy Nasdaq composite closed up 5.60 or 0.23% to 2,441.09.

Market breadth was positive. On the New York Stock Exchange, winners beat losers 9 to 7 on volume of 1.54 billion shares. On the Nasdaq, advancers beat decliners 17 to 12 on volume of 1.94 billion shares.

Nearly one-fourth of the S&P 500 is due to report results this week. Currently, earnings are on track to have risen about 10% from the same quarter a year ago. The Fed meeting is scheduled this week where policymakers are widely expected to hold the key short-term interest rate steady. Investors will be paying close attention to what the bankers have to say about the economy and the future direction of interest rates in its accompanying statement. Concerns about a host of economic reports due out later this week, has also prompted investors to wait and watch.

There were a spate of merger and take-over news. Merril Lynch closed down $2.14 to $92.39, after stating that it would buy First Republic Bank for $1.8 billion. Stock of First Republic Bank closed up $15.33 to $53.63. Citigroup closed down $0.61 to $54.06, on announcing that it is buying Egg Banking from Britain's Prudential PLC in a $1.13 billion deal. Altris closed up $5.41 to $32.55, on news that it will be bought by Symantec for about $830 million. Stock of Symantec closed down $0.25 to $17.52.

Shares of Bristol-Myers Squibb closed up $1.22 or 4.7% to $27.43, on merger speculation with the French pharmaceutical giant Sanofi-Aventis. This would make it the biggest drug company in the world. Bristol is understood to have signed a pre-merger deal. Stock of Sanofi closed down $0.64 to $44.70.

Intel and IBM both said separately that they are each developing smaller, faster chips. Stock of Intel closed up $0.36 to $20.89, and IBM closed up $1.09 to $98.54. Both companies are using "high-k" technology that substitutes a new material into a portion of the transistor that controls its primary on/off switching function, reducing leakage by more than 10 times.

U.S. light crude oil for March delivery fell sharply, easing $1.41 to settle at $54.01 a barrel on the New York Mercantile Exchange.

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