Wall St indexes rise on Countrywide takeover buzz
|
|
|
NEW YORK (Reuters) - U.S. stocks ended higher on Thursday following news Bank of America is in advanced talks to buy struggling mortgage lender Countrywide Financial Corp .Financial stocks rose amid hopes that a possible sale of Countrywide would mark a turning point for beaten-down lenders and other mortgage finance companies crippled by the housing slump."A Bank of America deal for Countrywide gives people confidence that maybe the financials are not as toxic as people think if Bank of America sees value there," said Edward Bretschger, director of equity sales and trading at Calyon Securities in New York.The Dow Jones industrial average <.DJI> ended up 117.78 points, or 0.92 percent, at 12,853.09. The Standard & Poor's 500 Index <.SPX> was up 11.20 points, or 0.79 percent, at 1,420.33. The Nasdaq Composite Index <.IXIC> was up 13.97 points, or 0.56 percent, at 2,488.52.Financials may not enjoy the same gains on Friday after American Express Co said after the close of trading it is seeing signs of a weaker U.S. economy and is adopting a cautious view for 2008.Shares of AmEx fell 7.1 percent to $45.45 in extended-hours trading.Countrywide shares surged more than 50 percent to $7.75. Sources familiar with the matter told Reuters the No. 2 U.S. bank is in advanced talks to takeover the top mortgage lender. Rumors of a Countrywide bankruptcy earlier in the week dogged the company's shares, sending the stock to a low of $4.43 on Wednesday.The KBW Mortgage Finance index <.MFX> rose 6.8 percent. Other related sectors, such as homebuilders and investment banks, also gained.The market earlier took direction from remarks by Federal Reserve Chairman Ben Bernanke, who acknowledged that the economy was slowing sharply, but held out prospects of deep cuts in interest rates.As one of the biggest-weighted sectors in the stock market, the recent poor performance by financials was seen as the key reason for the market's poor start to 2008.Airline stocks, which had been hammered recently by recession worries and oil near $100 a barrel, surged after The Wall Street Journal reported Delta Air Lines Inc plans on Friday to ask its board for permission to begin merger talks with Northwest Airlines Corp and United Airlines parent UAL Corp .Delta shares jumped 18.2 percent to $15.98. Northwest shares surged 32 percent to $15.85 and UAL rose 23.7 percent to$32.19.Shares of Wal-Mart Stores Inc rose after the world's No. 1 retailer reported December sales that topped Wall Street estimates, but the gains came from sales of groceries and other necessities, suggesting that consumers are holding back from making discretionary purchases.Other retailers, such as clothing chains Men's Wearhouse and AnnTaylor Stores Corp cut their earnings outlooks on slowing consumer spending.Wal-Mart stock rose 3.2 percent to $48.40, but Men's Wearhouse shares dove almost 30 percent to $17.84 while AnnTaylor stock fell 15.5 percent to $19.95.(Additional reporting by Kristina Cooke)
(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
|
|
|
|
|
|
Related News
Five more US bank failures bring total for 2009 to 120
New York - Bank failures in the United States have risen to 120 this year as five more regional institutions were added to the list, the US agency that guarantees the safety of bank deposits said. United Commercial Bank in San Francisco with assets o...
US stocks climb slightly despite double-digit jobless rate
New York - US stocks posted mild gains Friday to end the week as investors shrugged off government figures that put the unemployment rate above 10 per cent. The Labour Department said the jobless rate hit 10.2 per cent in the month of October, the hi...
US joblessness hits 10.2 per cent, highest in 26 years - Summary
Washington - The US unemployment rate surged to 10.2 per cent in October, the highest in 26 years as another 190,000 people lost their jobs, the Labour Department reported Friday. The figure comes after a 9.8-per-cent jobless rate in September and wa...
US joblessness jumps to 10.2 per cent, highest since 1983 - Update
Washington - The US unemployment rate surged to 10.2 per cent in October, the highest in 26 years, as another 190,000 people lost their jobs during the month, the US reported Friday. The figure reported by US Labour Department came after the 9.8 per ...
US jobless rate jumps to 10.2 per cent
Washington - The US unemployment rate surged to 10.2 per cent in October as another 190,000 people lost their jobs, according to US Labour Department figures released Friday. The jobless rate stood at 9.8 per cent in September. Unemployment had been ...
Bulls stop James, edge Cavs - Summary
Los Angeles - The King couldn't deliver in the clutch. Luol Deng and Joakim Noah combined to deny LeBron James a potential game-winning drive in the final seconds as and the visiting Chicago Bulls snapped the Cleveland Cavaliers' three-game winning...
Mortgage lender Fannie Mae posts nearly 19-billion-dollar loss
Washington - US mortgage lender Fannie Mae said Thursday that it would seek 15 billion dollars in federal aid, after posting its ninth consecutive quarterly loss. Fannie Mae reported a net loss of 18.9 billion dollars in the third quarter of 2009, co...
|
|
|
|
|
|
|
|
