Merger Monday Reports of major acquisitions could give stocks a higher start to a week that will be dominated by the Fed meeting Wednesday and Thursday. June 26 2006: 6:22 AM EDT
NEW YORK (CNNMoney.com) -- Major merger announcements could give stocks a higher open to begin a week that will be dominated by the Federal Reserve meeting.
Stock futures rose in early trading, indicating a higher open for the market after a difficult week.
Johnson & Johnson (Charts) announced a $16.6 billion deal to buy the consumer products unit of fellow Dow component Pfizer (Charts). Shares of both companies were higher in Frankfurt trading. The unit includes such well-known brands as Listerine, Rolaids, Rogaine and Sudafed
Phelps Dodge (Charts) agreed to acquire two major Canadian nickel miners Inco (Charts) and Falconbridge (Charts) in a $40 billion transaction
In addition the long running hostile takeover battle in the European steel industry ended with Arcelor bowing to an improved $32.2 billion takeover bid from Mittal Steel (Charts) on Sunday creating a world giant three times larger than its nearest rival. Major markets closed mostly higher in Asia on that merger news, while major European markets were mixed in early trading.
The only major economic report due Monday is the Census Bureau's report on new home sales. Economists surveyed by Briefing.com forecast that sales fell to an annual pace of 1.15 million from about a 1.2 million pace in April.
A slowing housing market is one of the things likely to be weighed by the Federal Reserve when it meets Wednesday and Thursday. But economists and investors are in agreement that at least a quarter-percentage point rate hike by the Fed certain, and a growing minority of investors believe a half-percentage point increase is possible.
Treasury prices fell in early trading, lifting the yield on the 10-year to 5.23 percent from 5.22 percent late Friday. Bond prices and yields move in opposite directions.
The dollar edged lower against the yen and the euro.
In commodity markets, oil prices were little changed in early trading.
The August light crude futures contract for NYMEX slipped 9 cents to $70.78 a barrel in electronic trading, while Brent was down 4 cents to 69.89.
In other corporate news, General Motors (Charts) and bankrupt auto parts maker Delphi (Charts) are likely to disclose today how many hourly workers have accepted GM's lucrative buyout offer to leave the companies, helping those two troubled companies shave labor costs. The Detroit News is reporting the number of employees taking the up to $140,000 buyouts could top 40,000.
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