Weekly Outlook
Stocks opened higher as M&A activity continued to be in focus as Hewlett Packard plans to acquire software maker Opsware (NASDAQ: OPSW) for $1.6 billion or $14.25 per share. On the earnings front, Dow component Merck (NYSE: MRK), along with Schering Plough (NYSE: SGP), and Halliburton (NYSE: HAL) beat earnings expectations and paced the market higher in Monday trading.
Today General Electric hosts a technology conference while the controlling family of the Dow Jones News Company contemplates a $5 billion buyout from Rupert Murdoch’s News Corp. A divided Board of Directors at Dow Jones has those following the deal wondering what will happen next. Meanwhile in Detroit, automakers begin negotiating with the United Auto Workers to formalize their next contract.
Tuesday look for St. Louis Fed President William Poole to discuss energy and his macroeconomic outlook, while Amazon.com reports earnings that are expected to rise 30% with earnings per share expected to more than triple to $0.16 up from a nickel. Wednesday brings the June existing home sales report, while May’s report showed sales fell to their worst level in four years with rising inventories. The Federal Reserve also releases its beige book survey of regional economic activity.
Thursday expect new home sales to drop by 1.6% to an annualized rate of 5.9 million that according to Lehman Brothers. Durable goods orders are expected to climb 2% in June, while Microsoft holds an analyst meeting and Ford Motor Company reports earnings. Friday, second quarter gross domestic product is reported with analysts expecting an annualized rate of just over 3% after a first quarter reading of just 0.7%.
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