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The analysts who said the wild bidding war for 3Par Inc. was a precursor to more mergers in the data-storage space were right on, given International Business Machines Inc.'s deal this past week to buy Netezza Corp.

Alas, investors who are now convinced and are looking to buy into the sector may have little profit to show for it, as the industry's sharp rise after the 3Par battle has muted deal premiums.

While the $33 (U.S.) per share Hewlett-Packard Co. will pay for 3Par is more than triple its pre-deal price, IBM's purchase of Netezza represents just a 10 per cent premium.

That's in part because Netezza had already risen 77 per cent between Aug. 13, the day before the first 3Par bid, and Sept. 17, the last day before IBM announced the deal.

There are still some companies at the dance: CommVault Systems Inc. , Compellent Technologies Inc. and Isilon Systems Inc. are all pegged by analysts as tasty targets.

But CommVault is up more than 40 per cent since day one of the 3Par saga; Compellent nearly 60 per cent; and Isilon nearly 50 per cent. For Isilon, the merger speculation goosed what was already a hot summer, as it's up more than 80 per cent since June 30.

Since 3Par sold for nearly 10 times revenues and 180 times forward earnings, according to Standard & Poor's Capital IQ, Netezza was cheap at seven and 102 times, respectively.

Those numbers suggest Isilon, currently selling at more than 9.5 times sales and 100 times earnings, already reflects deal pricing. Compellent is under four times sales but 88 times earnings.

The bargain of the bunch, if you're still willing to wade in? CommVault, at a mere 3.5 times sales and 34 times forward earnings.

Economists have been saying for months that the U.S. consumer needs to realize the recession is over and start acting with new found confidence.

Well, the recession has formally been declared over, long over, but the consumer hangover remains - and could be getting worse.

The Conference Board Consumer Confidence Index for September, scheduled for release Tuesday, is hanging around recessionary territory, with expectations for a decline to 51.0 from August's 53.5, according to the analysts at Action Economics. It's been sliding since May's 62.7.

The Conference Board's survey is perhaps the best-known measure of consumer sentiment. It is also one of the last to be released, as several competing confidence indexes have already produced September numbers. The University of Michigan's Consumer Sentiment survey, another prominent index, showed a drop to 66.6 from 68.9 in August.

While the Conference Board's reading is still well above the February 2009 record low of 25.3, "the data remain at recessionary levels on an historical basis, which highlights the ongoing pessimism of consumers," Rick MacDonald and Mike Englund write.

(Since U.S. consumers seem to be focusing on their stagnant wages, lack of job opportunities and trashed home prices, there's no reason to believe the pronouncement from the National Bureau of Economic Research about the recession's end would matter terribly in the survey. And even if it would have, the Conference Board's questioning wrapped up Sept. 21, the day after the NBER's statement.)

They do note confidence tends to lag activity early in an expansion . "We expect confidence to climb to higher levels over the next few quarters to leave readings more consistent with at least a subdued expansion, although recent figures do suggest concern about the outlook."



Investors seeking gains from a recent surprise rise in steel prices have challenges. No funds are based strictly on the commodity price, and as for owning it outright - well, if you think gold bullion presents a storage challenge, how about a little hot-rolled coil in the backyard?

That leaves two exchange-traded funds that hold the stocks of iron and steel companies.

Van Eck Global's Market Vectors Steel ETF (SLX) tracks the NYSE Arca Steel Index, holding only companies that trade on that U.S. exchange. That leaves room, however, for global concerns like the British-Australian Rio Tinto PLC and Brazil's Vale SA, which are 14.5 and 13.2 per cent of the fund, respectively. About one-third of the fund is U.S. steel companies.

PowerShares Global Steel (PSTL) is based on the NASDAQ OMX Global Steel Index; less than 9 per cent of the fund is U.S.-based, with South Korea, Brazil and Japan each representing 15 per cent to 17 per cent of the fund. The top holding is South Korea's Pohang Iron and Steel Company, or POSCO, at 13.4 per cent.

The Wall Street Journal reported last week that some steel companies are instituting double-digit increases as demand picks up. The rebound is good news for the ETFs, which have rebounded from summer lows when price forecasts were glum.

The question, however, is where the ETFs go from here, with the answer depending on your view of the global recovery. "Some suspect that the [steel price]rally will be short-lived, running out of steam before the calendar turns to 2011," Michael Johnston of ETF Database wrote on his blog at the Seeking Alpha website. "Expectations for muted economic growth in the U.S. and much of the developed world will no doubt weigh on demand for the foreseeable future."

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