Stock Market News for December 22, 2009

A series of corporate deal announcements and analyst upgrades of two Dow components returned to boost confidence on the Street and sent stocks sharply higher even as a controversial legislation to revamp the U.S. healthcare system inched closer toward finalization. 

The mergers and acquisition front witnessed a busy Monday as Bucyrus International (NASDAQ:BUCY) offered to buy the mining operations of Terex Corp. (NYSE:TEX - Analyst Report) in a $1.3 billion all-cash deal.  Giving healthcare issues a major lift was Sanofi-Aventis’ (NYSE:SNY - Analyst Report) announcement to acquire retail health products maker Chattem (NASDAQ:CHTT) in a $1.9 billion deal. 

Premarket futures suggest a higher opening on the Wall Street, even as Moody's Investor Services (NYSE:MCO - Analyst Report) became the third rating agency to downgrade Greece's government bonds.  Dow Jones industrial average futures rose 29, or 0.3 percent, to 10,371. Standard & Poor's 500 index futures rose 3.50, or 0.3 percent, to 1,111.70, while Nasdaq 100 index futures rose 8.00, or 0.4 percent, to 1,833.50.

Meanwhile, a number of analyst upgrades also helped the broader market yesterday.  Alcoa Inc. (NYSE:AA - Analyst Report), which entered into a $10.8 billion deal with the Saudi Arabian Mining Co. to develop a major mining operation, jumped 7.9% after Morgan Stanley (NYSE:MS - Analyst Report) lifted the stock to “overweight.”  Morgan Stanley (NYSE:MS - Analyst Report) said it sees a tight market for aluminum pricing “well into 2010.”  The analyst increased the earnings estimate to 75 cents from 50 cents and the price target to $22.

Goldman Sachs (NYSE:GS - Analyst Report) added to the upbeat sentiment as it recommended shares of Mosaic (NYSE:MOS - Snapshot Report), and added Potash (NYSE:POT - Analyst Report) to its Conviction Buy List, on positive outlook for fertilizer prices. 

Barclays Capital (NYSE:BCS - Snapshot Report) upgraded shares of Intel (NASDAQ:INTC - Analyst Report) to "overweight" from "market weight," basing its decision on "seemingly solid end market conditions, an upward bias to estimates and intriguing valuation." Intel shares advanced 2.3%.

On Monday, the Dow Jones industrial average advanced 85 points, or 0.8%, to 10,414.14.  The Dow average is now up 0.7% for December.  The S&P 500 index climbed 11 points, or 1.1%, to 1,114.05.  The Nasdaq composite advanced 26 points, or 1.2%, to 2,237.66, its highest level since September 2008.   Volume was down to a modest 1.013 billion shares, with advancing issues ahead of decliners by a five-to-one margin.  The dollar advanced 0.4% to 78.10 against a basket of currencies.

The difference between yields of the 2- and 10- year notes widened to a record divide as the yield on the 2-year rose 8 bps to 0.87%, while it rise 15 bps on the 10-year to 3.69%.

Healthcare stocks, which have been among the laggards this year, advanced 1.1% yesterday.  As the final revisions of the $871 billion reform package took shape and the bill appeared headed for a final, Thursday vote, investors viewed the sector with increased confidence.  Aetna (NYSE:AET - Analyst Report) gained 4.7%, Cigna (NYSE:CI - Analyst Report) advanced 3.9%, Humana (NYSE:HUM - Analyst Report) rose 3.5%, and WellPoint (NYSE:WLP - Analyst Report) closed up 2.9%.

Read the full analyst report on BUCY

Read the full analyst report on TEX

Read the full analyst report on SNY

Read the full analyst report on CHTT

Read the full analyst report on MCO

Read the full analyst report on AA

Read the full analyst report on MS

Read the full analyst report on GS

Read the full analyst report on MOS

Read the full analyst report on POT

Read the full analyst report on BCS

Read the full analyst report on INTC

Read the full analyst report on AET