U.S. stocks jumped on Monday after a raised buyout offer for Bear Stearns Cos Inc suggested that financial stocks may have reached bottom, especially in light of fresh data that fueled hopes for a turnaround in housing.
Stocks rang up big gains for a second straight session after JPMorgan Chase & Co lifted its offer for Bear Stearns to $10 a share from $2, helping alleviate concerns that other investment banking shares could tumble. JPMorgan's move also relieved worry that a prolonged fight with disgruntled shareholders could have derailed the deal.
Financial stocks also got a boost from an article in the Barron's newspaper suggesting that downtrodden bank stocks could rebound by 10 percent to 20 percent by year end. Bear Stearns shares, which at their session high were more than doubled their Thursday's closing price, ended up 76.1 percent. Citigroup, the largest U.S. bank by assets, was among financial sector standouts in the S&P 500, with its shares up 3.5 percent, while shares of American Express Co, a credit card and travel services company, led the Dow's financials with a 3.1 percent gain.
A surprising increase in sales of pre-owned homes last month fueled optimism that the worst of the housing slump may have passed. That ignited a rally in home building shares.
The Dow Jones industrial average climbed 187.32 points, or 1.52 percent, to finish at 12,548.64. The Standard & Poor's 500 Index ended up 20.37 points, or 1.53 percent, at 1,349.88. The Nasdaq Composite Index shot up 68.64 points, or 3.04 percent, to close at 2,326.75. Monday's gains, coming after a three-day Easter weekend, helped Wall Street notch its first back-to-back advance for March and its biggest 2-day jump in almost 4 months. The S&P 500 achieved its highest close for the month, and with this advance, the benchmark index trimmed its drop from its October record closing high to a decline of 13.1 percent.
Stocks rang up big gains for a second straight session after JPMorgan Chase & Co lifted its offer for Bear Stearns to $10 a share from $2, helping alleviate concerns that other investment banking shares could tumble. JPMorgan's move also relieved worry that a prolonged fight with disgruntled shareholders could have derailed the deal.
Financial stocks also got a boost from an article in the Barron's newspaper suggesting that downtrodden bank stocks could rebound by 10 percent to 20 percent by year end. Bear Stearns shares, which at their session high were more than doubled their Thursday's closing price, ended up 76.1 percent. Citigroup, the largest U.S. bank by assets, was among financial sector standouts in the S&P 500, with its shares up 3.5 percent, while shares of American Express Co, a credit card and travel services company, led the Dow's financials with a 3.1 percent gain.
A surprising increase in sales of pre-owned homes last month fueled optimism that the worst of the housing slump may have passed. That ignited a rally in home building shares.
The Dow Jones industrial average climbed 187.32 points, or 1.52 percent, to finish at 12,548.64. The Standard & Poor's 500 Index ended up 20.37 points, or 1.53 percent, at 1,349.88. The Nasdaq Composite Index shot up 68.64 points, or 3.04 percent, to close at 2,326.75. Monday's gains, coming after a three-day Easter weekend, helped Wall Street notch its first back-to-back advance for March and its biggest 2-day jump in almost 4 months. The S&P 500 achieved its highest close for the month, and with this advance, the benchmark index trimmed its drop from its October record closing high to a decline of 13.1 percent.
Source: Reuters
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