Revamped Bear offer, home sale data lift Wall Street
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By Ellis MnyanduNEW YORK (Reuters) - Stocks soared on Monday as a five-fold increase in JPMorgan Chase & Co's offer to buy Bear Stearns reassured investors about financial sector valuations and fresh data fueled hopes of a turnaround in housing.Investors warmed to the higher offer for Bear Stearns, to about $10 a share, as it may avert a long shareholder battle and let JPMorgan close the deal sooner.The raised offer also helped quell valuation concerns since the initial offer of $2 a share had been seen as suggesting that financial shares had further to fall as banks grapple with the impact of the credit crisis.Investors snapped up financials, with shares of Citigroup , the largest U.S. bank by assets, up more than 6 percent, while those of credit card and travel services company American Express Co climbed more than 4 percent to lead Dow financials.Bear Stearns shares more than doubled to $12.23, while the S&P financial index <.GSPF> gained 2.2 percent."More writedowns are expected in the financial space but people are starting to see a light at the end of the tunnel and they suspect that it's not an oncoming train," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey. "At $2 a share for Bear Stearns, the question was what were the rest of the financials worth?"The Dow Jones industrial average <.DJI> jumped 213.78 points, or 1.73 percent, to 12,575.10. The Standard & Poor's 500 Index <.SPX> advanced 24.57 points, or 1.85 percent, to 1,354.08. The Nasdaq Composite Index <.IXIC> rallied 71.13 points, or 3.15 percent, to 2,329.24.Wall Street was on track for its first back-to-back advance in the month of March.Home builders were another standout after a report from the National Association of Realtors showed a surprise jump in the February pace of existing home sales in the United States. The Dow Jones home builder index <.DJUSHB> shot up 5.8 percent.Retailers also surged after upscale jeweler Tiffany & Co posted an unexpectedly high quarterly profit and forecast robust growth in markets outside the United States and Japan. The S&P retail index <.RLX> was up 3.3 percent.Tiffany shares were up 11.9 percent at $43.21 on the NYSE.Citigroup shares rose to $23.94 on the New York Stock Exchange, while those of American Express jumped 4.3 percent to $48.01. Among home builders, shares of Toll Brothers , a luxury home builder, climbed 5.7 percent to $24.41.Technology shares also shone, with semiconductor stocks among the biggest gainers following positive broker action by Lehman Brothers on shares of such companies as Analog Devices Inc , whose stock jumped 4.6 percent to $29.65.Lehman also raised its rating on Fairchild Semiconductor International , Intersil Corp and Microsemi Corp to "overweight" from "equal weight."Fairchild shares were up 7 percent at $11.90 on the NYSE, Intersil climbed 5 percent to $26.64 on the Nasdaq, while Microsemi advanced 3.8 percent to $23.75.Shares of Apple Inc , maker of the iPod, climbed 4.4 percent to $139.15, making the stock the top gainer on the Nasdaq.(Editing by James Dalgleish)
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