Good day! Monday's session was a busy one for the markets. Economic data was on the light side, but there was a great deal of focus on mergers and acquisitions. The top ones included AOL's (AOL) agreement to buy The Huffington Post for $315 million, EnsCo's (ESV) acquisition of Pride International (PDE), Danaher's (DHR) agreement to buy Beckman Coulter (BEC), and the anticipated buyout of Genzyme (GENZ) by Sanofi-Aventis (SNY).
Dow Jones Industrial Average
The indices kicked of the week strongly. The index futures were already breaking the daily trading range thanks to Friday afternoon's recovery. The bias continued in premarket trade when the index futures broke higher once again in the early-morning hours on Monday. This breakout around 3:00 a.m. ET was followed by a period of congestion heading into Monday's opening bell. Such congestion is typically bullish and the market broke strongly to the upside out of the bell.
The rally on Monday continued easily into 11:00 a.m. ET. At that correction period, however, it started to lose a bit of its momentum. The Nasdaq outperformed and remained in the trend until around 11:30 a.m. ET, while the S&P 500 and Dow Jones Ind. Average each hit slightly higher highs mid-day. This created a reversal strategy into noon.