Market Analysis: Key Stocks and Trends for July 3, 2006

Strategic Insights -

On July 3, 2006, Schaeffer's Market Blog highlighted several stocks and trends, including a temporary labor agreement between United Parcel Service (UPS) and its pilots' union, an upgrade on General Motors (GM), and notable activity in semiconductor stocks. Additionally, takeover speculation surrounding Alcoa (AA) and a sharp surge in Midway Games (MWY) shares caught investors' attention.

Key Takeaways:

  • UPS has reached a temporary labor agreement with its pilots' union, which could lead to a short-covering rally if the stock continues to push higher. The stock boasts a short-interest ratio of 6.6 days to cover.
  • General Motors has been upgraded to "neutral" from "sell" by Banc of America Securities, with a price target increase to $30 from $15. The brokerage believes an alliance with Renault and Nissan could provide short- to medium-term benefits.
  • Semiconductor stocks, including Applied Materials (AMAT), Atmel (ATML), Intel (INTC), Micron Technology (MU), and Texas Instruments (TXN), showed notable gains, with the AMEX Semiconductor HOLDRs Trust (AMEX:SMH) emerging higher by about 0.80 percent.
  • Alcoa has gapped higher amid takeover rumors, with JP Morgan suggesting that foreign rivals Rio Tinto (RTP) and BHP Billiton (BHP) have the available funds to make an acquisition bid.
  • Midway Games has surged sharply higher, gaining more than 11 percent with no news. The stock is currently hovering around the nine level, where it has found former support and its declining 20-week moving average.

Statistics:

  • UPS shares rose nearly one percent in the first 15 minutes of trading.
  • General Motors was upgraded by Banc of America Securities, with a bullish price target increase to $30 from $15.
  • The AMEX Semiconductor HOLDRs Trust (AMEX:SMH) emerged higher by about 0.80 percent.
  • Alcoa has gained more than two percent in today's trading and is now perched back above its 10-week and 20-week moving averages.
  • Midway Games has surged sharply higher, gaining more than 11 percent with no news.

Sources:

  • Schaeffer's Market Blog, July 3, 2006
  • The Wall Street Journal, July 2, 2006
  • Banc of America Securities report, July 3, 2006
  • Schaeffer's Option Advisor, July 3, 2006
  • Schaeffer's Investment Research, www.SchaeffersResearch.com
  • Forbes, 2006
  • Barron's, 2006