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Stock Market Preview for 1/10/2011

January 10, 2011

U.S. stock index futures are lower this morning after markets in Asia and Europe declined. Trading was closed for holiday in Japan.

China’s markets were lower after its trade surplus came in at a smaller-than-expected rate. European markets were hit by news that Portugal may be under pressure to accept an aid package from the European Union and the International Monetary Fund.

European governments are floating $43 billion this week in debt offerings. The cost of insuring against default on European debt is at record levels. The news had helped to weaken the euro further, sending the dollar higher against its basket.

SLEThe higher dollar in turn has helped push down most commodity prices. The one exception so far is crude oil, which has risen with the closure of the Trans Alaska Pipeline and a halt of production on the North Slope in efforts to repair a leak discovered over the weekend. A prolonged disruption could push crude prices up toward $100 per barrel, according to some analysts.

In stock-specific news, Duke Energy agreed to buy Progress Energy for $46.48 per share. This move had been expected, with the premium at 4 percent over Friday’s closing price.

DuPont will acquire Danish enzyme maker Danisco for $5.8 billion.

Standard Microsystems announced that it would offer to buy Conexant Systems in a deal valued at $248 million. Conexant shares are trading up nearly 19 percent, close to the $2.25 per share offering price.

Shares of Sara Lee are up more than 6 percent this morning after a weekend Wall Street Journal article suggested that the company could get a bid for the company from a consortium consisting of Apollo Global Management, C. Dean Metropoulos, Bain Capital, and TPG Capital.

Helen of Troy Shares may trade higher after its earnings report this morning beat consensus expectations.

Earnings season kicks off today with Alcoa, and with Apollo Group reporting after market close. Supervalu reports tomorrow. Intel will report on Thursday and JP Morgan on Friday before market open.

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