Call it a tale of two headlines:
"Microsoft and Yahoo in talks again on online unit": 30 Nov 2008/Reuters
"Microsoft-Yahoo deal "total fiction:" 30 Nov 2008/Reuters
So which is it?
One of the key players originally mentioned as a possible replacement for Yahoo CEO Jerry Yang has told a Wall Street Journal blog that a proposed Microsoft/Yahoo deal is "total fiction". That story was unveiled by the U.K.-based Sunday Times, which reported that Microsoft would buy Yahoo's search division for $20 billion; and that a key part of that deal would be Microsoft bringing in its own management team.
"The team would be led by ex-AOL Chairman and CEO Jonathan Miller and former Fox Interactive Media President Ross Levinsohn," the report said. Tell that to Levinsohn, who told the AllThingsDigital blog that there was no truth to the story. The blog went on to report that key sources at both Yahoo and Microsoft also dismissed the report.
Either all of the key sources are lying or there is no deal in place. Right now, it looks like the latter. But the soap opera we know as Yahoo-Microsoft looks like it might go on forever.
With that story on the back burner - again - the focus is on the stock market today. The Dow Jones Industrial Average and the Standard & Poor's 500 Index were able to string together gains for five straight days in the last five trading sessions, the first time that's happened since July, 2007, and the biggest five-day percentage spike since the 1930's.
That should end today, as investors scale back, take some profits, and assess the economic tea leaves coming out this week. That process begins with the Institute for Supply Management, a trade group of purchasing executives, that will release its monthly report on manufacturing activity this morning (Monday). Similar readings released earlier in China and the U.K. show that manufacturing contracted sharply in those economies in November.
Also this morning, the Commerce Department will report that construction spending dropped in October. Construction spending for October likely fell by 0.9 percent, according to the consensus view of economists surveyed by Thomson/Reuters. Late this week the November jobs numbers come out from the U.S. Labor Department, another key benchmark for cautious investors this week.
One sector where investors might make some hay this week is in the high-end technology market. "Technology is one of the most attractive sectors in the stock market presently, offering high-quality names at greatly reduced prices, technology sector analyst Ben Rogoff from Polar Capital Partners told CNBC this morning. Rogoff especially likes Apple, Microsoft, Goggle, and Research in Motion. Rogoff told "Squawk Box Europe" that those companies used to trade at 20-times earnings and are now 10-times earnings. "If you can buy quality businesses, franchise businesses at 10-times earnings, why would you mess around with small-cap subscale businesses at five-times earnings," Rogoff said. "It just seems daft to me."
Just food for thought on what should be a busy post-holiday trading session.