Hilton in the Headlines

In a low-volume, holiday-shortened week it would probably be a mistake to draw too many conclusions from market activity. Looking at the benchmarks, it's easy to say that the bulls are back in charge. That may well be the case, but we will be a lot more confident when we see the June highs surpassed. It hasn't happened yet. Until it does the best we can say is that we are approaching the top of a trading range. Over the last month, this range marked lower lows and lower highs, a fact which should give bullish advisors reason to pause.

On a more glamorous note, Hilton was back on the front page today. This time, it wasn’t Paris who grabbed the headline. Private equity behemoth Blackstone Group (BX) announced the acquisition of the original Hilton hotel chain (HLT) for $20.1 billion – a premium of 32% over Tuesday's close. This action spurred investors to look for other hotel buyout targets and gave a boost to consumer discretionary and leisure-related sector funds.

Statistics released today revealed that service companies grew at a faster-than-expected rate in June, the best showing in fourteen months. The bullish sentiment in services could not overcome a jump in Treasury yields, however, and the day ended on a flat note.

Crude oil rose to a ten-month high on concern that unrest in Nigeria may affect oil shipments. A surprisingly high inventory report this morning cut into the gains, but by the day's end both crude oil and energy sector funds posted small gains. Momentum is so strong that it would not take much of a supply disruption to make energy spike higher.