Exxon (XOM) and IBM (IBM) led the blue chips higher Monday as investors moved beyond talk about Fed tapering, at least for a day. After two straight weekly losses, the major averages posted strong gains to open the new week.
Among the blue chips, Exxon Mobil gained 2 percent after Goldman Sachs raised its rating to ‘buy’ from ‘neutral.’ Exxon shares hit an all-time high. IBM jumped 3 percent, but it’s still the year’s biggest loser among the Dow 30.
While there’s still plenty of concern about retail buying this holiday season, credit card companies are expected to come out as winners. Discover Financial (DFS), MasterCard (MA) and American Express (AXP) all rose about 1 percent, and Visa (V) was slightly higher.
Another theme today was mergers and acquisitions. Sprint (S) is reportedly interested in buying T-Mobile US (TMUS). Both stocks rallied when the story broke just before the close on Friday, but they gave back some of those gains Monday. Sprint lost 1 percent, while T-Mobile fell 4.5 percent.
Also, Singapore-based chip maker Avago has agreed to buy LSI (LSI) for $6.6 billion. Both stocks rallied. LSI soared 39 percent and Avago gained 10 percent. And AIG (AIG) has agreed to sell its International Lease Financing unit for $5.4 billion. Its stock gained more than 1 percent. And Valeant Pharmaceuticals (VRX) gained 4 percent after agreeing to buy Solta Medical (SLTM). Solta jumped 40 percent, but still trades for less than $3 a share.
Herbalife (HLF) jumped 9 percent after releasing new audits for the past three years that show no material changes, despite charges that it is run like a Ponzi scheme.
And finally, Twitter (TWTR) fell 4 percent after downgrades from Wells Fargo and SunTrust. But Twitter is still up 29 percent over the past month.
What to Watch Tuesday:
- Commerce Department releases current account trade deficit for the third quarter, 8:30 a.m. Eastern.
- Labor Department releases Consumer Price Index for November, 8:30 a.m.
- National Association of Home Builders releases housing market index for December, 10 a.m.
- Federal Reserve policymakers begin a two-day meeting to set interest rates.
–Produced by Drew Trachtenberg.