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Energy Stocks Jump On Merger!

|Includes: APA, BAC, C, COF, CSIQ, DVN, ECA, HQCL, LDK, MA, TSL, UPL, V, WFC, Exxon Mobil Corporation (XOM), XTO

Last night, Dubai received a $10 billion bailout from Abu Dhabi.  This morning, XOM announced a $31 billion deal to buy XTO, sending XTO stock up more than +15%!  Other stocks in the energy sector jumped as well:  APA +4.09%, DVN +4.55%, UPL +3.78%, ECA +4.99%.  Besides natural gas companies, solar stocks were also up:  CSIQ +10.08%, TSL +4.79%, SOLF +6.29%, LDK +5.96%.  Coinciding with the U.N. climate conference, investors turned their attention to "cleaner" energy stocks.  Analysts were scrambling to try to identify the next potential takeover target in the energy space.

Last Friday, C had announced its plans to pay back its TARP loan.  This evening, WFC also declared that it will repay its $25 billion of bailout funds.  C shares traded down 6.33% today.  WFC gained +2.16% in after-hours after its TARP payback announcement.

The market reached new closing highs for 2009, with the Dow up +29.55 points, SPX adding +7.7 points, and Nasdaq gaining +21.79 points:

Most sectors joined the rally today, with commodity sectors leading the market:  XME (metals and mining) +2.17%, GDX (gold miners) +1.35%, OIH (oil services) +1.3%, PBW (clean energy) +1.8%.  UNG (natural gas) jumped +2.72%.  XLF (financials) added +0.56% while HGX (housing) gained +1.32%.  MOO (agriculture) was on the weak side.  FXI (Chinese ADRs) finished slightly higher.

SPX

SPX added +7.7 points to close at 1114.11.  Its daily MAs and MACD curved up.

Nasdaq

Nasdaq gained +21.79 points to close at 2212.1, above the 2200 level.  Its daily MAs and MACD went higher.

Both SPX and Nasdaq are showing new bullish formation in their respectively daily MAs.  Nasdaq appears to be stronger, closing above the recent resistance level of 2200.  SPX is still eyeing the 1120 level.  The boost from the energy stocks certainly helped the market today.  The financials are slowly trying to establish a bottom from the recent weakness.  Last Friday, after the market close, V was announced to be added to the S&P 500 Index on 12/18/09.  Today, it initially jumped to almost $86/share and quickly pulled back.  In the afternoon, V regained its upwards momentum and finished the day at $84.77, up +4.22%.  MA also pushed up to a new 52-week high at $247.48, rising +1.45%.  I think MA can still go higher from here.  COF continued to break out after rising for 4 straight days.  BAC, C, and WFC have all been approved to pay back their TARP loans.  Although the initial reactions to the TARP payback is still unclear, the recent development in the financials could finally draw investors back into this sector and help the market to go beyond SPX 1120.

Good night and HappyTrading! ™



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