Merger Monday! Plus, Watch These Stocks After The Close

• January 31, 2005
• Brice Wightman

Stocks are higher on M&A
news and a fairly peaceful Iraqi election. Also, oil is lower, as
OPEC did not change output quotas at its meeting yesterday. Crude slid below
$47/barrel.

SBC is buying  AT&T for $16 billion. SBC will issue .77942
shares for each T share and a $1.30 special dividend when the deal closes.

ExxonMobil
(
XOM |
Quote |
Chart |
News |
PowerRating) reported Q4 earnings of $8.42
billion–beating by 0.25–helped by higher crude prices.

Marsh & McClennan
(
MMC |
Quote |
Chart |
News |
PowerRating) agreed to pay $850 million to settle
charges it took payoffs from insurance companies in return for referring
clients.

Earnings continue this week, including Disney
(
DIS |
Quote |
Chart |
News |
PowerRating) today after the bell; estimates are 0.29. Also look for Aflac
(
AFL |
Quote |
Chart |
News |
PowerRating)
to report 0.58 after the close. Tomorrow, look for Google
(
GOOG |
Quote |
Chart |
News |
PowerRating)
after the bell; estimates are 0.79-0.80.

Personal income for December rose +3.7%, above
estimates, and personal spending rose +0.8%, slightly below estimates. The
income gain would have been smaller if not for the one-time $3/share Microsoft
dividend paid on December 2. December new home sales rose 0.1%. Homebuilders
(
HGX.X |
Quote |
Chart |
News |
PowerRating)
are weak on the news.

Here are the major index numbers for January:

Dow Utilities   
+2.1%

S&P 500        
-2.7%

Dow               
-2..8%

Russell 2000    -4.9%

Nasdaq          
-5..3%

Dow Trans.      -6.0%

Trading trivia: February is historically one of
the worst months of the year. Interestingly, with the exception of 2001, the
last 13 post-election years have been down; this, according to The Stock
Trader’s Almanac. January has been down four of the last six years.

Strong sectors are: Internet
(
GIN.X |
Quote |
Chart |
News |
PowerRating) +1.45% 
Healthcare
(
HMO.X |
Quote |
Chart |
News |
PowerRating) +1.49%  Semis
(
SOX.X |
Quote |
Chart |
News |
PowerRating)
+1.44% 

Weak are: Gold
(
XAU.X |
Quote |
Chart |
News |
PowerRating) -0.25%   Homebuilders
(
HGX.X |
Quote |
Chart |
News |
PowerRating)
-0.14%   Drugs
(
DRG.X |
Quote |
Chart |
News |
PowerRating) -0.12%

Dow		10,427.28
S&P 500		1171.35
Nasdaq		2035.83

The dollar is +0.01 at
83.49

Crude Oil is -0.48 at
46.70

Gold is -2.70 to 420.60

ce=”Arial” size=”2″ face=”Arial”>Volume is 689 million on the NYSE and
805 million on the Nasdaq.

Market breadth is positive.

NYSE	Issues
Advancing	2273	Up Vol 457
Declining	874	Down Vol 172
	2.60	2.65
Nasdaq
Advancing	2003	Up Vol 616
Declining	923	Down Vol 129
	2.08	4.77

Stocks in the News

Lockheed Martin
(
LMT |
Quote |
Chart |
News |
PowerRating) won the contract to make
Marine
One and also won a $208 million Navy contract for Aegis missiles..

The FDA approved Mylan’s
(
MYL |
Quote |
Chart |
News |
PowerRating) generic pain patch.

Wyeth
(
WYE |
Quote |
Chart |
News |
PowerRating) reported a Q4 loss after taking a $4.5 billion charge
related to its recalled fen-phen diet drug.

Tyson
(
TSN |
Quote |
Chart |
News |
PowerRating) missed by 0.13 and lowered 2005 guidance.

Brice Wightman