Good earnings report from Merck and a couple of merger news in the oil drilling and financial sector started off the week on a strong note today, Monday, 23 July 2007. Though earnings report from Texas Instrument and American Express failed to impress investors, Merck alone accounted for one-third of Dow’s 92 point gain today.

The Dow Jones Industrials closed higher by 92 points to 13,943. Tech-heavy Nasdaq gained 2.9 points to close at 2,690. S&P 500 closed higher by 7.4 points to 1,541.

Twenty-two of the thirty Dow stocks closed in the green today. GE, Merck, P&G and Verizon were the top-most Dow winners today. Caterpillar and Alcoa remained the main Dow laggards.

Pharmaceuticals ranked among today's top three performing S&P industry groups after Merck topped Wall Street expectations and raised its full-year forecasts. Merck reported second-quarter income of $1.7 billion, which was up 12% from $1.5 billion in the same quarter last year.

The oil-services sector got a lift as two of the biggest names in the oil-drilling business, Transocean and GlobalSantaFe said they would merge in a deal creating a $53 billion oil-and-gas drilling behemoth. The merged company will be known as Transocean and will have a global fleet of 146 rigs. GlobalSantaFe stock was 3.6% higher and Transocean shares rose 5.5%.

Oil & Gas Drillers was today's biggest winner

When the market opened in the morning, stocks opened substantially higher right out of the gate. The proposed $53-billion merger of equals between Transocean and GlobalSantaFe was the primary catalyst.

Of the nine sectors trading higher, telecom and uilities turned in the best performances.

The renewed wave of buying interest has been prevalent in technology and health care, while the energy sector's ability to shrug off oil prices near session lows was also noteworthy.

In other merger news, Barclays sweetened its offer for ABN Amro to $93 billion and added a cash portion to it.

Oil & Gas Drillers was today's biggest winner because of the proposed RIG-GSF merger.

American Express and Texas Instrument disappoint Wall Street

After the close, Dow component American Express reported that second-quarter profit rose about 12%, helped by rising spending by international cardholders but it fell short of Wall Street expectation. Texas Instruments shares fell nearly 3% to $37.01 in after-hours trading after the chip giant said sales and earnings fell in its second quarter.

Crude oil futures fell today and settled below $75 after exports resumed back from Angola and on reports that’s that OPEC is concerned about global crude supplies.

Crude-oil futures for light sweet crude for September delivery closed at $74.89/barrel (lower by $0.90/barrel or 1.2%) on the New York Mercantile Exchange. During intra-day trading, prices touched $74.44. Prices are up 23% this year.

On the New York Stock Exchange, 1.5 billion shares exchanged hands, while nearly 2.1 billion were traded on the Nasdaq. Declining issues topped advancers 16 to 15 on the NYSE and by a ratio of 16-13 on the Nasdaq.

For tomorrow, with no economic data scheduled till Wednesday, emphasis will be focused on earnings. Dow component AT&T, DuPont (DD) and McDonald's are expected to report before the opening of the bell.