Data storage company EMC Corporation (EMC) announced today that it has increased its offer to acquire all the outstanding common stock of Data Domain (DDUP) to $33.50 per share in cash, raising the total value of the proposed acquisition to approximately $2.1 billion, net of Data Domain’s cash.

EMC believes that its all-cash offer is “clearly superior to the $30 per share stock-and-cash proposal from NetApp” and the company is also announcing that it is prepared to close the transaction within two weeks, which would be almost a month faster than the NetApp (NTAP) proposal.

Shares of Data Domain area trading up $.91 on the news and are currently at $34.12, which is higher than the proposed buyout offer, partly on traders’ belief that a bidding war could erupt for the company, sending the shares even higher.

Shares of Bemis (BMS) are rallying in early trading, currently up $1.23 to $25.47 on news that the company is buying the Food Americas packaging business of Rio Tinto (RTP).

Bemis will pay $1.2 billion for Alcan Packaging, which includes manufacturing facilities in the U.S, Canada, Mexico, Brazil, Argentina and New Zealand.

Bemis expects that the transaction, which will take its share of the global packaging market to 70%, from the current 57%, will be accretive to its diluted GAAP earnings starting in 2010.

The stock market is at a critical juncture. Thursday’s huge drop in the major indices and the close at or near the day’s lows, should cause some nervousness on Monday, with traders waiting to see if a further breakdown is in store.

The S&P 500 broke below is 50-day moving average on Thursday and the 100 day moving average is just below that. Stock market technicians will be watching so see if we violate that as well, which could portend a move down to the 200-day moving average line.

While the technical signals are screaming caution, we are cautiously optimistic. From a technical analysis standpoint, we are getting a double bottom formation, from which we could see a bounce. Additionally, we got the huge drop on Thursday because of poor economic data.

In recent weeks, we’ve seen the stock market drop on concerns about the global economy and within day’s there is some commentary from somewhere that renews hopes that we are at a bottom in terms of the economy and stocks rally.

So in the hoped for absence of more bad news next week, we might see the same happen in this instance as well.

Traders can look to purchase call options on the S&P 500, while protecting on the downside by buying smaller quantities of puts as well. We also like IBM at current levels, which we’ve recommended in an earlier post, as a trade for Monday.

Of course, we do want to trade with caution and make sure that the stock market is indeed heading in the direction we choose to trade.

The Federal Deposit Insurance Corporation or FDIC, which insures the bank deposits of U.S. bank depositors at FDIC-insured institutions, on Thursday, announced that seven banks were shut down by either the Office of The Comptroller, or the banking regulators in the states the banks were operating in, bringing the total number of banks that have failed so far this year, to 52. Six of the banks were in the state of Illinois and the other was in Texas.

By comparison, exactly half the current 2009 total, or 26 banks failed in all of 2008 and even that too was larger than normal, the result of the financial and overall economic credit crisis that worsened as 2008 progressed.

In 2007, there were just three bank failures, in 2006 and 2005 there were none, in 2004 there were four, in 2003, there were three, in 2002, another bad year, there were eleven, in 2001, there were four and in 2000, just two.

As a result of the failure of the seven banks, the FDIC’s insurance fund will take a $314.3 million hit, raising the total tally for the year to $12.3 billion. In 2008, the bank spent a total of $17.6 billion.

With the government worried about the possible repercussions of the failure of a large institution, it has been providing support to the larger banks to ensure that they don’t fail, however, the local community banks have been left to their own devices and if any is deemed to be insolvent, it is shut down.

The banks:
Founders Bank of Worth, Illinois, had eleven branches, total assets of $962.5 million and total deposits of $848.9 million. The FDIC has entered into a purchase and assumption agreement with The Private Bank and Trust Company of Chicago, Ill., which will assume the deposits of Founders and is purchasing $888.4 million of Founders’ assets.

John Warner Bank, which is based in Clinton, Illinois, had three branches, total assets of $70 million and total deposits of approximately $64 million. The State Bank of Lincoln of Lincoln, Illinois will assume all of the deposits of the failed bank.

First State Bank of Winchester in Winchester, Illinois had two branches, total assets of $36 million and total deposits of approximately $34 million. The First National Bank of Beardstown, of Beardstown, Ill., will assume all of the assets and deposits of the failed bank.

The First National Bank of Danville in Danville, Illinois had seven branches, total assets of $166 million and total deposits of approximately $147 million. The FDIC entered into a purchase and assumption agreement with First Financial Bank, N.A., based in Terre Haute, Indiana, which will takeover the deposits of First National Bank and purchase $148 million in assets.

Elizabeth State Bank in Elizabeth, Illinois had two branches, total assets of $55.5 million and total deposits of approximately $50.4 million. The FDIC has entered into a purchase and assumption agreement with Galena State Bank and Trust of in Galena, Ill, which will purchase $52.3 million in assets.

Rock River Bank of Oregon, Ill., had four branches, total assets of $77 million and total deposits of approximately $75.8 million. The FDIC has entered into a purchase and assumption agreement with The Harvard State Bank, which will assume the deposits and purchase $72.9 million in assets.

Millennium State Bank of Texas, based in Dallas, Texas, had one branch, total assets of approximately $118 million and total deposits of $115 million. The State Bank of Texas will assume all the deposits and just about all of the assets as well.

The failed banks will all reopen on Monday as branches of the banks that assumed their deposits.

Yesterday’s news from the Labor Department, that the U.S economy lost 467,000 jobs in June, sending the unemployment rate to 9.5%, renewed concerns that the economy is in trouble. That sent oil prices tumbling 3.7%, with crude for August delivery falling $2.58 to close at $66.73.

Yesterday’s price decline is being followed by a drop of $1.22 today, sending crude price down to $65.51.

IBM (IBM) was a big contributor to the 223-point loss in the Dow Jones Industrial Average on Thursday, with the $3.11 drop in the stock. The pull back however, put the stock at a key support level from which it should bounce off, if we don’t get any bad economic or company specific news in trading early trading next week.

Looking at a six-month chart of IBM, we see that at the end of March though the first couple days of April, IBM rallied right up to the $102 area, but then pulled back slightly, and traded in a range between $98 and $102, never quite being able to break above $102.

Then on April 28, the stock gapped up at the open and over the subsequent four trading days, the stock continued to trade higher and hit an intra-day high of $106.82 before starting to pull back again and forming support just underneath $102.

From a technical analysis standpoint, stocks that break out above a resistance area also tend to then form support at that area on a near-term pull back, which IBM has done. And if they do form support at the prior resistance area, then that is usually a bullish signal. Either the stock bounces back up again, or worse case scenario, we see a consolidation or sideways move.

We are recommending IBM at current levels on an expected bounce although traders should confirm that the market is not going to weaken further when trading resumes on Monday.

Word of caution, we would also like to point out that IBM had rallied past $105 and actually formed another support area there which held. Then the stock formed a double bottom, using $105 as a base, another bullish signal.

Now, as seen on Thursday, that area was violated and the stock also broke below its 50 day moving average. With that being the case, before initiating a long trade, we want to make sure IBM won’t continue pulling back and fall to its 100 day moving average around $99. So go long only if the market looks firm or is beginning to move to the upside.

A worse than expected jobs numbers from the Labor Department sent stocks crashing in trading Thursday, ahead of the long Independence Day Weekend.

Before the bell, the Labor Department reported that that the economy lost 467,000 non-farm jobs in the month of June, from a revised loss of 322,000 jobs in May. This was worse that the 365,000 that economists had been forecasting. The country’s unemployment rate now stands at 9.5% in June, from 9.4% in May.

On the news, the Dow Jones Industrial Average lost 223.32 points to close at 8,280.74, for a percentage loss of 2.63%, NASDAQ lost 49.20 points to close at 1,796.52, for a percentage loss of 2.67%, the S&P 500 lost 26.91 points to close at 896.42 for a 2.91% loss and the Russell 2000 was off 20.25 points to 497.21, for a 3.91% loss.

In other economic news, the Commerce Department reported that orders for manufactured goods rose 1.2% in May, from a downwardly revised 0.5% climb in April. Economists had been forecasting a reading of 0.9%, so the number was much better that expected, however, the market could not shake the jobs numbers.

In trading, all thirty stocks in the Dow Jones Industrial Average fell, with IBM (IBM) the worst loser on a dollar basis, after the stock dropped $3.11 to close at $101.73. It was followed by Chevron (CVX), which lost $2.10 to close at $64.42, Exxon Mobil (XOM), which lost $2.07 to close at $68.49, United Technologies (UTX), which dropped $2.04, to close at $50.24 and Travelers (TRV), which was off by $1.93 to $39.20.

Coca Cola (KO) and Cisco (CSCO) were the “best” performers, after both only lost $0.30 to close at $48.88 and $18.50 respectively.

In broader trading, some of the major losers among the S&P 500 stocks included Google (GOOG), which was off $10.50 to $408.49, Amazon (AMZN) lost $2.28 to $79.32, Prudential Financial (PRU) was off by $2.26 to $34.94, Sears Holding (SHLD) dropped $2.67 to $62.48 and Wynn Resorts (WYNN) finished the session down $1.98 to $33.41.

M&T Bank Corporation was the best performer in the S&P 500, climbing $1.24 to $52.40, followed by Varian Medical (VAR), which rose $0.54 to $33.50.

The U.S. economy lost 467,000 jobs in June, which was substantially worse than the 363,000 in jobs losses that economists were forecasting. The nation’s unemployment rate now stands at 9.5% from 9.4% in May, a 26-year high.

Since the recession started in December of 2007, the economy has lost 6.5 million jobs and in total, there are now 14.7 million unemployed Americans.

Auto parts supplier Lear Corporation (LEA) announced on Wednesday evening, that it will be filing for Chapter 11 bankruptcy protection. To that end, the company has secured $500 million from a group of lenders that include JP Morgan Chase (JPM) and Citigroup (C) that the company plans to use to fund operations while it is in bankruptcy.

The company also announced that it is in talks with its creditors to secure support for the bankruptcy plan.

In a statement, company CEO Bob Rossiter said, “We intend to complete the restructuring as quickly as possible and emerge as an even stronger and more competitive partner to our customers.”
According to the company, Lear will default on a $38 million interest payment that on its 8.5% senior notes due 2013 and its 8.75 percent senior notes due 2016.

The company’s operations outside the United States will not be included in the bankruptcy protection filing.

Shares of Oshkosh Corporation (OSK) rose $3.89 to $18.43, which was a gain of 26.75%, in regular session trading on Wednesday, after the Pentagon announced late Tuesday, that the company had won a contract to supply the military with the next generation of mine-resistant, ambush-protected vehicles, or MRAPs. The vehicles will be used by Army and Marine Corps ground troops in Afghanistan. Oshkosh beat out three other companies, Force Dynamics, BAE Systems and Navistar International. Under terms of the $1.06 billion contract, Oshkosh will provide 2,244 of the MRAPs, with the possibility that the contract could be expand to cover 5,000 vehicles worth almost $3 billion.