Merger Rumblings Are Positive Signs

 | Sep 16, 2011 | 12:43 PM EDT  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

utx

,

txt

,

tyc

,

roc

,

gr

,

cbe

,

nue

,

etn

When was the last time you heard there could be a $20 billion industrial deal in the works? When was the last time that anyone felt you couldn't short the cyclicals with reckless abandon because of Chinese, Indian and Brazilian tightening and U.S. and European weakening?

I can't recall a time.

Yet that's what's happening today with rumors rife that United Technologies (UTX:NYSE) is about to buy Textron (TXT) or Tyco (TYC) or Rockwell Collins (ROC) or Goodrich (GR) or any number of a host of companies that could fit in the giant conglomerate's diversified portfolio.

I find even the notion that anyone believes it can happen to be quite intriguing. These kinds of deals used to be the mainstay, the staple of Monday mornings, where you pretty much expected a combination as businesses sought to capitalize on tremendous emerging-market growth.

These days, though, you expect to hear more stories like those from Cooper Industries (CBE), a really strong manufacturer that preannounced slower earnings growth, citing residential and commercial, or Nucor (NUE), which once again this week said business just isn't as good as was to be expected.

Perhaps some believe that business simply isn't that bad around the globe. We got strong auto sales out of Europe in the month of August. We have had executive after executive on "Mad Money" saying Asia remains strong. United Technologies itself, the rumored acquirer, came out just last week and said earnings estimates will be made, joining Eaton (ETN), which has a substantial European business, in saying, "What the heck is everyone so worried about?"

The answer had been, "Everything," but especially Europe and our own deteriorating growth picture. Maybe those worries are slowly dissipating? Maybe people feel that at this time next year we might be on the verge of dealing with a more pro-business president? Maybe stock prices are so low that some companies just want to take advantage of this opportunity?

No matter. The animal spirits kicked in today for the rumored industrial takeouts. The fact that they could even have any credence shows you that some are feeling much better about the much-scorned smokestack companies.

Columnist Conversations

There were nice reversal-type candles on the weekly charts of the major indices. The DOW and the S&P forme...
A number of stocks on my watch lists are attempting to form positive candles a key support levels. I noted th...
Lang:
While last week was a day to pull the plug and contemplate where the market was headed, I waited for some conf...
Shares of TSLA have formed multiple hammer candles at a key level of support defined by: the September head an...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.