Consumer Confidence Rises

Morning News of Note:

• Drilling: Unlikely Duo Tackles Drilling The House is set to vote this week on a bill to overturn a 25-year ban on oil and gas exploration along much of the nation's coastlines -- the result, in large part, of efforts by a political odd couple. Republican Rep. John Peterson, a former grocer, is a conservative from Pennsylvania, and Democratic Rep. Neil Abercrombie, a former college professor, is a liberal from Hawaii. Together, they have forged an industry-labor coalition around the argument that natural-gas prices are driving companies out of the U.S. and costing workers their jobs. (Full Story) WSJ
• GM: 47,600 Take Offers To Leave GM, Delphi About 47,600 workers accepted buyout offers or early retirement packages from General Motors Corp. and auto parts supplier Delphi Corp., the largest offers of their kind in U.S. corporate history. GM said 35,000 workers from the United Auto Workers and the IUE-CWA union took the offers of $35,000 to $140,000 to leave GM. Separately, Delphi said about 12,600 UAW-represented employees have taken early retirement. Delphi, which was also offering buyouts to workers who were not near retirement age, did not provide figures on how many have taken that option. (Full Story) Washington Post
• PALM RIMM: Rumor: Palm and RIM to merge? Palm's got the gadget lovers, Research in Motion's got the suits. Might this be a match made in heaven? A buzz is starting to build around the possibility that Palm and RIM might announce plans to merge on Thursday, when both companies plan to announce quarterly earnings. We noticed it on Technology Evangelist, although it has popped up in other places. (Full Story) CNET
• GOOG EBAY: Google Gets Ready to Test GBuy, A New Online-Payment Option For years, consumers who didn't want to give Web merchants their credit-card information faced limited options when it came to making purchases online. This week, consumers could get access to another electronic-payment option -- and one that offers a mail-in rebate incentive to boot. Web-search giant Google Inc. is set to introduce a test version of its GBuy online-payment service as early as this week, according to people briefed on the situation. (Full Story) WSJ
• MRVL: Marvell Tech-MRVL purchases Intel's communications and application biz for $600M. Both companies have signed an agreement for Intel (INTC) to sell its communications and application processor business to MRVL for a purchase price of $600M plus the assumption by Marvell of certain liabilities. The transaction is expected to close in approximately four to five months and is subject to regulatory review and other normal closing conditions

Market Comments: The market is struggling to hand on to small gains in the first hour of trading. Bond yields are lower this morning, with the 10-year yield down to 5.20%. Oil is trading a bit higher to $72.25.

Marvell (MRVL) bid for Intel's (INTC) communications unit and said the deal would be dilutive to earnings. That has hit the stock hard, currently off -11%. This is weighing on the overall semi index.

Consumer confidence came in at 105.7 vs. 103.9 consensus. And Existing Home Sales were 6.67 mln vs. 6.61 mln consensus.

We don't want home sales to pick up again too quickly, because the weakness should get the Fed to pause. But we certainly don't want housing to plummet, as the risk could take the whole economy down with it.

Hank Paulson is testifying before Congress this morning. Fwiw, I think he would probably be a great Treasury Secretary.

long GOOG