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Real Story: Celebration Interruptus

The S&P fails to set a new record, leading some to ask 'Is this it?' Plus, Adam Feuerstein on Elan's big move and ASCO leaks.
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The stock market rally, rising Treasury yields, a rebounding dollar, strength in machinery stocks like

Deere

(DE) - Get Report

and an uptick in so-called C&I loans all point to an economic rebound in the second half of 2007, Aaron Task says on Monday's

"The Real Story" podcast. "That has profound investing implications."

The

S&P 500's

failure to establish a new closing high Monday in no way changes the bullish trend, Task says, adding that speculation that a "top" was made today is another sign of skepticism which is bullish from a contrarian standpoint.

One reason

TheStreet.com's

editor-at-large remains bullish is the ample liquidity which is fueling M&A and private equity activity worldwide. Such trends were a highlight again Monday, most notably:

  • A roughly $25 billion private equity deal for Alltel (AT) - Get Report, which gave a boost to other rural wireless players, including Dobson (DCEL) and Rural Cellular (RCCC) .
  • Hologic (HOLX) - Get Report acquiring Cytyc (CYTC) in a $6.2 billion combination.
  • Williams Cos. (WMG) - Get Report selling its power generation business to Bear Stearns (BSC) for $512 million.
  • Olin (OLN) - Get Report acquiring fellow chlorine and caustic soda maker Pioneer (PONR) for $413 million.
  • Video-game publisher Electronic Arts (ERTS) announcing plans to acquire a roughly 15% stake in The9 (NCTY) - Get Report, a Chinese online-gaming operator.

Speaking of China, Jianyin Investment Co., an investment fund operated by the Chinese government, said Sunday that it will buy a $3 billion stake in the private equity firm Blackstone Group LP. The news comes just days ahead of a meeting between U.S. and Chinese officials, including Treasury Secretary Paulson and Chinese Vice Premier Wu Y, Task notes.

Outside of M&A, the big news today was the renewed strength in crude and related stocks, as well as the pharmaceutical/biotech industry. Task's guest,

TheStreet.com's

biotech columnist Adam Feuerstein, was on to discuss the latter, including

Elan

(ELN)

and

Wyeth

(WYE)

advancing their Alzheimer's drug Bapineuzimab into a phase III trial.

Feuerstein also discussed recent weakness in

ImClone Systems

(IMCL)

TheStreet Recommends

and

Regeneron Pharmaceuticals

(REGN) - Get Report

ahead of the big ASCO cancer drug confab next week.

Other drug stocks in the news Monday included

GlaxoSmithKline

(GSK) - Get Report

, which tumbled on news that the FDA has raised safety concerns about its diabetes drug Avandia;

Luna Innovations

(LUNA) - Get Report

, which soared after the FDA approved its Edac Quantifier device; and

Antigenics

(AGEN) - Get Report

, which issued a positive late-phase study of its Oncophage kidney cancer vaccine.

In the remainder of the podcast, Task discussed other corporate news, including weakness in retailers

Saks

(SKS)

and

Lowe's

(LOW) - Get Report

, which fell into "the Geoff Tate Zone," as well as

Netbank

(NTBK)

, which just fell hard.

Click

here to listen to the entire podcast.