Stock Market News for March 22, 2011

Markets ended in the green for the third consecutive day as indices moved higher on Monday, bolstered by bullish sentiments over big ticket mergers and acquisitions. Signs of the nuclear crisis in Japan stabilizing added to the cheer and the Dow crossed its psychological mark of 12,000 for the first time since the nuclear crisis.

The Dow Jones Industrial Average (DJIA) crossed the psychological 12,000 mark and closed at 12,036.53 adding 1.5%. The Standard & Poor 500 (S&P 500) also gained 1.5% to end at 1,298.38 and the Nasdaq was up 1.8% to finish the day at 2,692.09. On the New York Stock Exchange consolidated volumes were 4.5 billion shares and for every 5 stocks that advanced, 1 stock was on the declining side.

AT&T, Inc. (NYSE:T - Analyst Report) confirmed that it will acquire telecom rival T-Mobile, bringing more cheer to investors. The acquisition was settled in a cash-and-stock deal worth $39 billion with Deutsche Telekom AG. The management from both parties has approved the acquisition but the hurdle of regulatory approvals is yet to be overcome. With the completion of the deal, the nation’s second largest wireless carrier will march on to become the largest US telecommunication company. T-Mobile is the nation’s fourth largest wireless carrier and this deal is likely to spark possibilities of further acquisitions in due time. Verizon Communications Inc. (NYSE:VZ - Analyst Report), the second largest in the arena might also look for acquisitions.

Following these developments, shares of AT&T rose 1.2% and settled at $28.26. Verizon also gained a significant 1.7%, but Sprint Nextel Corp. (NYSE:S - Analyst Report), the third largest telecom company, was left on the losing side as it plunged 13.6%. Bankers opine that Sprint may acquire smaller companies like Clearwire Corporation (NASDAQ:CLWR - Snapshot Report), MetroPCS Communications, Inc. (NYSE:PCS - Analyst Report), Leap Wireless International Inc. (NASDAQ:LEAP - Analyst Report). However, in a sphere where 80% of the market is dominated by AT&T and Verizon, none of those acquisitions is likely to help Sprint put up tough competition.

Also among the M&A news, Charles Schwab Corp. (NYSE:SCHW - Analyst Report) said it will buy optionsXpress Holdings, Inc. (NASDAQ:OXPS) for 1 billion US dollars. The acquisition of online brokerage services provider optionsXpress will bolster Charles Schwab’s options trading business. Shares of Charles Schwab jumped 0.5% and optionsXpress surged 16.8%.

The Japanese nuclear situation was reported to be on its way to stabilization according to comments from the U.S. Nuclear Regulatory Commission (NRC). Bill Borchardt, head of operations at the NRC calmed frayed nerves as he suggested better conditions at the Fukushima Daiichi plant and said: "I would say optimistically that things appear to be on the verge of stabilizing". Naoto Kan, the Prime Minister of Japan, provided further reassurance as he said that efforts to restore power to two reactors at Fukushima Daiichi plant have begun. He also said: "We aren't out of the crisis situation yet, but we are seeing a light at the end".

In a bid to protect civilians, air-strikes by the international coalition forces continued in Libya and the ensuing violence saw crude prices surging. Over the weekend roughly 100 cruise missiles have been dropped against pro-Gaddafi forces. Forces loyal to Libyan leader Muammar Gaddafi stuck to their fight and Gaddafi vowed to wage a “long war” against the international military forces. The tension boosted speculation about crude supply, which already has been severely damaged after unrest in the nation which used to produce 2% of the global oil output. However, the unrest in Libya, which had unnerved investors earlier failed to take markets lower and its effect was limited only to pushing oil prices higher. On the New York Mercantile Exchange, light, sweet crude for April delivery was up 1.3% and settled at $102.33 per barrel.

On the domestic front, the National Association of Realtors reported a 9.6% fall in the sales of previously owned houses in February. Sales of previously owned houses fell to a seasonally adjusted annual rate of 4.88 million, last month, from 5.4 million in January 2011. This raises concerns over the recovery of the housing sector but investors, on Monday, shrugged off this negative data and concentrated on big-ticket positive news.

On a sectoral basis, the Financial Select Sector SPDR Fund gained 0.5% but was slower in the rally of the broader market as Citigroup, Inc. (NYSE:C - Analyst Report) unveiled a 1-for-10 reverse stock split plan. Citigroup also announced its plans to pay 1 cent quarterly dividend. Shares of the company lost 1.5% and settled at $4.43 per share. Among other bank stocks, JPMorgan Chase & Co. (NYSE:JPM - Analyst Report) and U.S. Bancorp (NYSE:USB - Analyst Report) both shed 0.2% and BB & T Corp. (NYSE:BBT - Analyst Report) lost 0.5%.

The Energy sector received a boost after Anadarko Petroleum Corporation (NYSE:APC - Analyst Report) signed a deal worth $1.6 billion. The stock rose 3.5% and other energy shares like Exxon Mobil Corp. (NYSE:XOM - Analyst Report), Chevron Corp. (NYSE:CVX - Analyst Report), Newfield Exploration Co. (NYSE:NFX - Analyst Report) and Rowan Companies Inc. (NYSE:RDC - Analyst Report) surged 2.5%, 2.3%, 4.4% and 5.5%, respectively. The Philadelphia Oil Service Index was up 3.9% and the NYSE Oil Index and the NYSE Arca Natural Gas Index gained 2.7% and 2.4%, respectively.

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Stock Market News for March 22, 2011

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