Modest rise as M&A talk, firm dollar counter rising crude

Small-cap shares opened flat and then edged higher, underpinned by news of a big-cap energy acquisition, a firm tone in the dollar, and ideas that Wednesday’s post-FOMC minutes slide was overdone. At 9:52 a.m. ET, the Russell 2000 (NYSE:IWM) was up 2.46, or 0.34%, at 729.56.

News that NRG Energy (NYSE:NRG) tendered a bid to buy Calpine Corp. (NYSE:CPN) for a stock deal worth $11 billion injected some enthusiasm back into the M&A picture this morning, and played a supportive role in market psychology. Calpine shares were up 7.1% shortly after the opening on the news. If there are large-cap merger deals to be done, then there are certainly bargains to be had within small caps.

There are several apparel retailers coming out with earnings today, which could ripple through the markets. Children’s Place Retail Stores (Nasdaq:PLCE), which is right on the upper end of small-cap market capitalization, reported solid quarterly results this morning and the stock was up 6.2% right after the open.

Large caps in the news early today include Pfizer Inc. (NYSE:PFE), which tumbled 1% on the opening on news that its anti-smoking drug had serious side effects. Also, NetApp Inc. (Nasdaq:NTAP) tumbled 5.7% as the company’s forward projections disappointed.

Crude oil prices shot above $135 dollars a barrel overnight, and continue to be a drag on the both the consumer pocketbook and the cost structure for corporations (just ask the battered airline industry). Goldman Sachs technical analyst Kevin Edgeley said in a research report overnight that crude oil momentum and trend strength are pointing higher, and that there is a long-term channel extension target for crude at $142.90. If crude oil were to close lower today, and well off that $135 record overnight peak, it could generate a topping reversal on charts, and is worth . . .

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