Stocks see gains Thursday on merger news and despite sharp rise in oil prices. The Dow ($INDU) added 81.58 points Thursday to close the session at 11,229.02. The S&P 500 ($SPX) gained 8.70 points to 1,253.39. The Nasdaq ($COMPQ) tacked on 22.96 points to 2,257.85. Volume was above average on the session with 1.53 billion shares traded on the NYSE and 2.30 billion shares exchanged on the Naz. Market breadth was positive by an 16-to-15 and 16-to-13 margin on the Big Board and Naz respectively.

Shares of Alcoa (AA) recovered nicely Thursday following a down day following its earnings report yesterday. Weakness in the overall market Wednesday left the stock lower despite providing a better than expected earnings release. AA shares tacked on nearly 10 percent today, more than making up for its 5 percent decline on Wednesday.

Dow Chemical (DOW) announced this morning that it would buy specialty chemical maker Rohm & Haas (ROH) for $15 billion. This was a huge premium to the closing price for ROH on Wednesday of $44.83. The deal prices ROH shares at $78, a 74 percent premium with ROH closing the session at $73.62. Some analysts feel DOW is paying too much for ROH and this helped push DOW shares lower by 4.2 percent on the session.

Shares of Wal-Mart (WMT) were unable to finish in the black despite announcing very strong same-store sales results for June. The retailing giant stated that same-store sales rose 5.8 percent with total sales up 9.9 percent year on year. Both figures were above forecasts, yet WMT shares fell 0.80 percent to $57.21, but the stock remains just shy of its 52-week high. Overall, same-store sales were better than expected at 4.0 percent growth during the month, yet the S&P Retail Index ($RLX) fell 3.18 percent.

Oil prices soared on the session with the commodity up 4.1 percent to $141.65 a barrel. However, crude prices did fall more than $9 in two days, leaving traders in a buying mood. Nonetheless, a raised outlook for 2009 by the IEA and continued testing of missiles in Iran provided the incentive to buy crude.

In economic news, jobless claims fell sharply for the week ending July 5 to a level of 346K. Expectations were for a reading of 399K with the four-week moving average down 10,000 to 380,500. However, continuing claims for the prior week rose by 91K to 3.202 million, which is this metrics highest reading in five years.

Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site