Breakout

Tuesday’s Stocks to Watch and Trading Headlines

Oil has proven anything but predictable, and the drama continues. The CME Group broke up an early week oil recovery as it raised oil futures margins by 25 percent -- $1,250 per contract -- as of the close of business Tuesday.

The roll of M&A continues Tuesday with reports that Microsoft is close to buying Skype in an $8.5 billion deal, helping investors shake off worries about a new Greek bailout, or possibly worse, a lack thereof. China was in focus also after it reported its monthly trade surplus grew for the second month in a row, although some are saying the rebound may be more an indication of deceleration of the Chinese economy than growing world demand.

FROM TWITTER:

@herbgreenberg: 1st thoughts on $MSFT >Skype: Is that really the BEST deal MSFT could do? Or a better/faster exit for PE rather than going thru w/the IPO?!
@jacobwcarlson: Skype + $MSFT probably renders WebEx superfluous. Enjoy that earnings conference call on Wednesday, Mr. John Chambers.
@redliontrader: NYSE took a little step back in breadth, worth watching $study
@zerohedge: LCH hikes margins on Santorini, Goldman traders delighted

FROM THE BLOGS:

What Makes a Good Oversold Reading -- Capital Observer

GS: $100B Rout in Commodities "Only Temporary" -- The Big Picture

STOCKS TO WATCH:

* Microsoft (MSFT) will buy Internet phone network Skype in an $8.5 billion deal.

 

* Disney (DIS) will report earnings today after the closing bell. The company is expected to report fiscal 2Q earnings of 57 cents a share.

* Community Health Systems Inc. (CYH) has withdrawn its $7.25 a share bid for Tenet Healthcare Corp. (THC). Tenet had earlier rejected this bid.

UPGRADES & DOWNGRADES:

* Tyson Foods (TSN) has been downgraded to underperform from buy at BofA/Merrill.

* Saks (SKS) has been upgraded to neutral from sell at Goldman.

* Cisco (CSCO) has been initiated with a buy at BGC Financial.

HEADLINES:

* After Sell-off Focus on Margin Requirements, China Data: Oil Survey — CNBC

* AIG Price: Bad News for a Big Investor — WSJ

* Citigroup Instantly Becomes a $40 Stock — WSJ

* No Silver Lining in Petroleum Prices - Barrons.com

* LinkedIn and Freescale Join Surge of I.P.O.'s — NYTimes

* Where to invest in a post-crisis world — MarketWatch

* Japan Unlikely to Get In Yen's Way — WSJ

* Why Berkshire and Buffett never lose — MarketWatch

* Dodd-Frank Dissenters Sound Off — NYTimes

* Hi-yo Silver, away! Commentary: Metal's drop doesn't mean bull market over — MarketWatch

* Once Vultures, Unwanted Suitors Now Seen as Strategists — NYTimes

Compiled by Elizabeth Trotta and Rebecca Stropoli.

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