Quiet open for stocks as traders look for reasons to continue pushing the major market indices higher. Last week saw solid gains for these indices, which left the Dow (DJI) in positive territory for the year, joining the S&P 500 (SPX) and Nasdaq (COMP). Better than expected economic news this past week benefited the bulls, as did merger activity. The economic calendar is light this week, but stocks are seeing gains on some merger news Monday morning.

AIG (AIG) is in the news again, announcing plans to sale its American Life Insurance Co. for about $15.5 billion in cash and stock to MetLife (MET). This follows the company's announcement last week that it was selling its Asian life unit to Britain's Prudential for $35.5 billion. AIG shares are up more than 5 percent in early trading with MET rising more than 4 percent.

McDonald's (MCD) shares are leading the Dow higher, up more than 2 percent. The fast-food giant announced that same-store sales rose 4.8 percent in February, thanks to strength overseas. The company did see weakness in the U.S., where bad weather a lack of jobs has led to less traffic. Same-store sales rose 0.6 percent in the U.S., compared with a gain of 5.4 percent in Europe and 10.5 percent in the Asian region. MCD is now approaching resistance at its 52-week high, which sits at $65.75 with the stock just below $65 currently.

With economic data nonexistent Monday and earnings light, traders have little to focus on. However, the National Association of Business Economists' did make news after stating they expect the Fed to raise rates within the next six months. Though rates aren't expected to rise at the FOMC meeting next week, we could see comments about rates staying low for an extended period of time taken out of the statement.

Traders might be wise in adjusting trades to account for a possible short-term decline. The CBOE Market Volatility Index (VIX) is sitting at support near 17.50. Unfortunately, when this point was hit in mid January, it led to a moderate correction that took the SPX from a price near 1,150 to a low of 1,050 by the first week of February. Volume figures have been light, showing little conviction in the move higher. This could result in profit taking, especially with all three indices in positive territory for the year.

Jody Osborne
Senior Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site