The Dow Jones Industrial Average (DJINDICES: ^DJI ) rose 112 points and the S&P 500 gained 18 as both stock market indices reached record highs on a quiet start to the week.
1. Tech stocks go nuts despite quiet market
Among the cricket-chirping on the floor of the New York Stock Exchange (no big data releases, no huge earnings releases, and no news of having Facebook do something crazy with its billions of excess cash), tech stocks rebounded from their recent whacking. Twitter (NYSE: TWTR ) , Facebook, and Amazon.com all rose at least 3.6%.
What was the cause of the rebound? These stocks rose despite low trading volumes and no big news, prompting analysts to credit hedge funds for the movement. Hedge funds trade for a living, and after the major losses tech stocks have taken over the past month, firms are ready to buy back into the cheaper stock price.
Twitter climbed the most with a 5.9% rise, because it got a stock rating upgrade from Georgia-based SunTrust investment bank. After debating what bulldog was the best ever mascot for the University of Georgia, SunTrust analysts supposed that the recent sell-off of Twitter went too far, and so it recommended to its clients to buy the stock.
2. DirecTV spikes after AT&T acquisition rumors
According to company insiders that leaked rumors to The Wall Street Journal, communications giant AT&T (NYSE: T ) is adding DirecTV (NASDAQ: DTV ) to its family plan. The deal could be announced in as soon as two weeks.
Like any wise subject of rumors, both companies declined to comment publicly. But if you're trying to trade stocks based on official announcements only, then you're going to get burned. Savvy traders make moves on rumors like these to snatch the stock at a cheaper price before the rest hear about the big news. DTV is trading up over 5% since the article hit the wire.
AT&T needs video to keep profiting off what people are demanding, and DirecTV needs better broadband Internet infrastructure. So it's a perfect match. The big question is what combination of debt and new stock AT&T needs to issue to raise the necessary cash. Reports say that the deal could value DirecTV at $50 billion, so DTV's stock price is rising in anticipation of the big buyout for shareholders.
3. Chiquita earnings get frozen
Just in time for our favorite part of the year, smoothie season, your favorite childhood banana distributor, Chiquita Brands (NYSE: CQB ) , reported first-quarter earnings on Friday that investors (figuratively) threw bananas at. Revenue for the first three months of 2014 fell 2% from the same period the previous year, to $762 million.
Frozen bananas are great for the Bluth Frozen Banana Stand in Arrested Development, but not so good for most consumers' banana-related needs (like, say, eating room-temperature bananas). The frigid U.S. winter and drought conditions in Central America forced Chiquita to purchase more expensive fruit to meet contract obligations with its business customers, such as grocery stores.
The takeaway is that investors sold down Chiquita stock Friday but bought shares back up 0.7% Monday because Chiquita's making some big changes. By the end of the year, Chiquita plans to complete a $1.07 billion stock deal to merge with Ireland's fruit distributor Fyffes to better avoid "banana supply volatility." Unfortunately, the new name will boringly just be ChiquitaFyffes.
As originally published on MarketSnacks.com
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