US markets look set to open higher today after new record closes for the Dow Jones Industrial Average and S&P 500 yesterday as beaten-down growth stocks re-emerged as top-gainers and M&A chatter continues with AT&T in late stage discussion to buy DirecTV for $50bn. Futures suggest the S&P500 will open 2 points higher at 1,898 with the Dow Jones expected to open 31 points higher at 16,726. In another challenge to US regulator, AT&T is in active talks to buy satellite TV provider DirecTV. The timing of the deal is direct response to Comcast’s pending acquisition of Time Warner cable. If regulators were to approve the Comcast deal it would make an AT&T’s deal a lot harder to refuse. It’s a bit surprising that DirecTV appears to have been favoured over Dish Network’s as a take-over target for AT&T. Given the competition over mobile wireless capacity, arguably Dish’s wireless portfolio would give an AT&T-Dish merger greater synergy. Going into earnings season, investors were lowering expectations after the cold US winter and it was the defensive, value stocks that outperformed, with utilities being one of the best-performing sectors. About nine out of ten S&P companies have now reported earnings and roughly 70% have beaten earnings estimates with just over 50% beating revenue projections giving some scope for a recovery in the sold-off growth sectors including technology. Yesterday it was those technology shares that beat the street including Facebook, Trip Advisor and Netflix that out-performed. This is not to say that these stocks are necessarily going to out-perform going forward, but having been knocked down the most, they see the biggest rebound when the broad market has a big up-day. The sideways market seen so far this year was likely a period of distribution of stocks that out-performed last year from strong to weak hands. If the bull market in stocks is now entering its next stage, the broad market should pull last year’s top performers including technology and biotech stocks higher, but they will no longer be the top performers.