Consolidation Ahead of One Last 2010 Push? (JEF, RTN, APSG, T, QCOM, BPL, CYD, ARTW)

It was another mixed day on Wall Street, something investors seem to have seen a lot of lately, not only this month but also this entire year. While the Santa Claus rally hasn’t gained a lot of steam recently, the market also hasn’t retreated either. As stocks consolidate their gains, we think there might just be one last push up before the year ends, although it might be more concentrated in stocks that have been momentum winners this year rather than in value names.

The Chinese Auto Parts Stocks Index was the top performing tickerspy Index on the day, led by China Yuchai (CYD) with a 5% gain. The Modular Building Stocks Index was the day’s worst performing tickerspy Index, with Arts Way (ARTW) down -3%.

Stocks finished the day mixed, with the Dow the sole loser, down -14 points to 12,478. The S&P advanced 3 points to 1,247, while the Nasdaq climbed 7 points to 2,650. Oil rose 79 cents to $88.81 a barrel, while gold added $6.90 to $1,386.10 an ounce.

In earnings news, shares of Jefferies Group (JEF) slipped -1.6% despite the investment bank reporting that its preliminary Q4 earnings topped expectations. For the period ended November 30th, net income was $70.7 million, or 35 cents per share, down from $93.5 million, or 46 cents per share, last year. Analysts were expecting EPS of 32 cents. Revenue jumped 29% to $695 million, while investment banking revenue surged 51% to $292 million. Four Pros held the stock in their top-15 U.S.-listed equity positions at the end of Q3, and 79 tickerspy members hold the stock in their portfolios.

In M&A news, defense contractor Raytheon (RTN) said it will purchase military equipment maker Applied Signal Technology (APSG) for $490 million in cash. Applied Signal shareholders will receive $38 per share, a premium of 8.5% over the stock’s closing price on Friday. The deal is expected to close during Q1 2011. Shares of Raytheon edged down -0.5% on the news, while Applied Signal shares rose 8.0%.

Shares of AT&T (T) inched down -0.3% after the telecommunication company announced that it will buy $1.93 billion worth of wireless spectrum from Qualcomm (QCOM) in a deal that is expected to close during the second half of 2011. The purchase will add capacity to AT&T’s forthcoming 4G data network. Previously, Qualcomm paid a total of $596 million for the spectrum. Over 400 Pros held AT&T in their top-15 U.S.-listed equity positions at the end of Q3, and 2,871 tickerspy members hold the stock in their portfolios.

Oil pipeline operator Buckeye Partners (BPL) said it will buy an 80% stake in Bahamas Oil Refining Company International (BORCO) from private equity firm First Reserve for $1.36 billion in cash and stock. Netherland-based Royal Vopak owns the other 20% of BORCO, which is the fourth-largest oil and petroleum products storage terminal in the world. Under the deal, which is expected to close during Q1 2011, First Reserve will get $400 million of new partnership units, $425 million raised from the sale of new units to institutional investors, and as much as $775 million in cash. After the deal closes, First Reserve will own about 8% of Buckeye. Shares of Buckeye moved up 1.2% on the news.

Tags: APSG, ARTW, BPL, CYD, JEF, QCOM, RTN, T