Thursday Morning’s Top Stories

China (NYSE:FXI) is looking for foreign investments in hospitals and financial firms instead of automobile factories or polysilicon plants, according to guidelines set by its National Development and Reform Commission (NDRC). The list, sitting on the agency’s website, notes the sectors for foreign investors that will be either encouraged, restricted or banned beginning on January 30, 2012. ”The focus is to optimize the foreign investment structure, push forward technology innovation and industrial upgrading,” said the NDRC in a statement.

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Alibaba.com (ALBIY.PK) appears to really want a deal with Yahoo (NASDAQ:YHOO). Alibaba has hired the Washington lobbying firm Duberstein Group. The move is seen as a sign that the company would be open to making a bid for all of Yahoo, along with some private equity firms,  if efforts to buy back Yahoo’s Asian assets doesn’t succeed.

Global merger and acquisitions dropped to their lowest levels in more than a year during the fourth quarter. It has dropped 16 percent from the previous quarter to $457.1 billion, with activity last seen since in mid-2010. Year to date, takeover volume has increased less than three percent to $2.25 trillion, according to Bloomberg.

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Looking ahead to 2012, a merger and acquisition recovery doesn’t look promising thanks to the current volatile market, the euro zone’s debt crisis, and tighter credit markets deterring cash-heavy companies from making transactions.

U.S. prosecutors are preparing criminal charges against BP PLC (NYSE:BP) employees in the 2010 Deepwater Horizon (NYSE:RIG) accident, reported The Wall Street Journal. Prosecutors at looking at Houston-based engineers and at least one of their supervisors but the extent of the investigation isn’t known. They contend that that workers could have given false information to regulators about the risks associated from the Gulf of Mexico well when drilling was going on.

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Thursday Morning Hot Stocks

Yahoo! Inc. (NASDAQ:YHOO) shares are climbing 1 percent higher early Thursday. Alibaba.com Ltd. has hired lobbying firm Duberstein Group Inc. as it seeks a deal with the internet portal giant.

Shares of BP PLC (NYSE:BP) are edging .14% lower. Some employees of the oil giant may face criminal charges relating to the 2010 oil spill disaster in the Gulf of Mexico. Shares of Chevron Corp. (NYSE:CVX) and Exxon Mobil (NYSE:XOM) are climbing higher on the news.

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The Mosaic Company (NYSE:MOS) is down more than 3 percent after announcing it will cut phosphate output by as much as 250,000 tons.  Mosaic is the world’s largest producer of phosphate fertilizer.  Other fertilizer stocks such as Potash Corp. of Saskatchewan, Inc. (NYSE:POT) climbed slightly higher.

Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) shares are falling 1.5 percent this morning.  Enobia Pharma Inc. has agreed to be purchased by Alexion for about $1.1 billion.  Pharmaceutical competitors such as Amgen Inc. (NASDAQ:AMGN) and Baxter International (NYSE:BAX) are trading slightly higher.

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Thursday’s Trending Stocks

The Dow Jones Industrial Average is trading upward 134 points on Thursday at 12,286, the S&P 500 Index is trading higher at 1,263, and the Nasdaq is trading up at 2,614. Here are the companies driving the investing chatter today:

Chesapeake Midstream Partners, L.P. (NYSE:CHKM): Shares of Chesapeake Midstream Partners, L.P. are trading higher 5% today. Chesapeake Energy (NYSE:CHK) stated yesterday it will sell $865 million in Pennsylvania pipelines to Chesapeake Midstream Partners, a spun-off subsidiary.

Exar Corporation (NASDAQ:EXAR): Shares of Exar Corporation are trading lower 2% today. Weaker than expected business conditions in Asia and Europe caused the company issue lower earnings and revenue guidance.

Fushi Copperweld, Inc. (NASDAQ:FSIN): Shares of Fushi Copperweld, Inc. are trading higher 1.3% today. The company is deliberating over the Chairman’s desire to take the company private for a value of $363 million.

Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN): Shares of Alexion Pharmaceuticals, Inc. are trading flat today. The pharma company entered into an agreement to acquire Enobia Pharma Corp. for $610 million in cash upon deal completion, with an additional $470 million to be paid upon achieving various milestones.

Arctic Cat Inc. (NASDAQ:ACAT): Shares of Arctic Cat Inc. are trading higher 1.35% today. The company recently purchased all of Suzuki Motor’s entire ACAT stake for $79.3 million.

Premier Exhibitions, Inc. (NASDAQ:PRXI): Shares of Premier Exhibitions, Inc. are trading higher 1.75% today. Recently, Premier Exhibitions and RMS Titanic signed a consignment agreement with Guernsey’s auction house.

EMCORE Corporation (NASDAQ:EMKR): Shares of EMCORE Corporation are trading lower4% today. Shares are continuing to sell off after disappointed shareholders with its latest earnings report release yesterday.

Hollysys Automation Technologies Ltd (NASDAQ:HOLI): Shares of Hollysys Automation Technologies Ltd are trading higher 16.9% today. HollySys was awarded three separate contracts to supply its proprietary industrial Distributed Control Systems.

Market Recap

Markets closed up on Wall Street today: Dow +1.10%, S&P+1.06%, Nasdaq +0.92%, Oil +0.29%, Gold -1.05%.

On the commodities front, Oil (NYSE:USO) climbed to $99.65 a barrel. Precious metals were mixed, with Gold (NYSE:GLD) falling to $1,547.60 an ounce while Silver (NYSE:SLV) climbed 1.78% to settle at $27.72.

Hot Feature: Oil Prices Could Stay Above $100 a Barrel Through 2012

Today’s markets were up because:

1) Housing. The number of Americans signing contracts to buy homes rose in November to an 18-month high, offering yet another sign of a tentative recovery in the housing market. The National Association of Realtors’ Pending Home Sales Index, which is based on contracts signed in November, increased 7.3 percent to 100.1 — the highest level since April 2010. A reading of 100 is considered healthy. The report boosted shares of homebuilders, including Pulte (NYSE:PHM), DR Horton (NYSE:DHI), Masco (NYSE:MAS), Lennar (NYSE:LEN), and NVR Inc. (NYSE:NVR).

2) Employment. New jobless claims rose more than expected last week, but the underlying trend may still point to an improving labor market. The U.S. Labor Department’s weekly report on initial unemployment benefits applications showed claims to have risen by 15,000 to a seasonally adjusted 381,000 in the week ended December 24. However, the four-week moving average, considered to be a better measure of overall trends, fell 5,750 to 375,000, its lowest level since June 2008. Furthermore, the weekly initial claims figure remains below the 400,000 mark that is normally associated with an improvement in labor market conditions.

3) Italy. The European sovereign debt crisis has remained a focal point in the eyes of investors throughout the year, and market trends have been strongly linked to progress, or lack thereof, made toward effecting a solution to the debt crisis. So when Italy, the euro zone’s third-biggest economy, saw yields on long-term bonds decline today, one day after yields on short-term bonds were halved, it gave investors hope that Italy will survive the crisis. However, the Italian bond market was buoyed by the European Central Bank’s new three-year liquidity measures. The ECB last week loaned European banks 489 billion euros in a bid to keep credit flowing to the euro economy, of which Italian lenders borrowed 116 billion euros. After today’s auction, the yield on the benchmark 10-year note climbed 12 basis points to 7.12 percent.

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After Hours Radar Stocks

Shares of AMR Corp. (NYSE:AMR) fell more than 35% in late trading.  NYSE Regulation, Inc. announced that shares will be suspended for trading prior to the opening on January 5.  Last month, AMR filed for Chapter 11 bankruptcy.  Airline companies such as  Southwest Airlines Co. (NYSE:LUV) and Jetblue Airways Corp. (NASDAQ:JBLU) closed higher on Thursday.

Home-builders such as Hovnanian Enterprises Inc. (NYSE:HOV), KB Home (LBH) and Toll Brothers Inc. (NYSE:TOL) continue to attract attention after large gains today. On Friday, it was reported that the number of Americans signing contracts to buy homes rose in November to an 18-month high.

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Sears Holdings Corp. (NASDAQ:SHLD) continues to head .36 percent lower after the closing bell.  The company released a list of the 100-120 store closings late Thursday.  Florida is the hardest hit with 11 Sears and Kmart outlets schedule to close.  Home retailers such as Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) stand to benefit from the closings.

After closing higher during regular trading hours, shares of Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) are edging lower in extended trading.  Investors shorted bank stocks more heavily in the first two weeks of December than in the last two weeks of November–but overall, short positioned declined for 5 out of the last 6 two-week periods, according to Raymond James.

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To contact the reporter on this story: Stella Mariz at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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