Merger news and positive comments from Lennar (LEN) not enough to push futures higher. Stocks might see some sideways trading to start the week ahead of the FOMC meeting on Wednesday. Last week, the major market indices saw solid gains with economic news providing incentive to buy. There is a lot of talk that stocks are overbought considering gains of nearly 60 percent since the March lows. The Dow ($INDU) is approaching strong resistance at the 10,000 level and this might be the point where the bears gain some control.

The big story this morning has been the news that Dell Computer (DELL) will buy Perot Systems (PER) for just under $4 billion. Dell is paying $30 a share in cash for PER, which is a 68 percent premium from Friday's close. As a result, PER shares are trading near $30 this morning. DELL shares are down five percent with the stock under $16. Dell is hoping this purchase will help expand the company's IT services offerings for businesses.

Trading in Asia was mixed overnight, although Hong Kong saw the completion of the second largest global IPO this year. Metallurgical Corp of China raised $5.12 billion with the stock rising 26 percent on the session. This was down from gains near 35 percent earlier in the session. Global IPOs have been heavy of late and this looks to continue. Spanish banking giant Santander said it will raise $7.3 billion in an IPO and Wynn Resorts reported that it has lifted the size of its IPO to $1.6 billion for its Macau casino operations.

Home builder Lennar reported earnings for the third quarter that were worse than expected. However, the company noted that it could return to profitability in fiscal 2010. Customer orders were down 8 percent during the quarter, but new orders did increase each month during the quarter. Despite this news, LEN shares are down more than three percent in early trading at a price just below $16. However, the stock is well above its 52-week low of $3.42.

The dollar is seeing strength this morning on the view the FOMC could provide an exit strategy from its monetary stimulus efforts. A meeting of the Group of 20 could also impact the dollar. With the dollar strengthening, the price of oil is falling this morning. Crude is down nearly $2 a barrel this morning, trading just above $70.

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