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US stocks move higher after Merrill receives capital infusion; traders hope for Santa rally

US stocks move higher after Merrill receives capital infusion; traders hope for Santa rally

Wall Street advanced Monday, boosted by news that Merrill Lynch & Co. will receive an investment of up to $6.2 billion (euro4.3 billion) from two investment groups.
Trading volume was light in Monday's abbreviated session _ a pro forma occurrence a day ahead of Christmas when most stock markets around the world are closed. Still, with only five trading days remaining in 2007, investors will perhaps be looking for any opportunity to tidy up their positions after a year that that brought the return of volatility after several years of unusual calm.
Merrill Lynch provided the only significant news of the day. The investment firm said it was receiving a widely expected cash infusion from Singapore's government-controlled investment fund, Temasek Holdings, and U.S.-based Davis Selected Advisers. The proceeds were expected to cushion Merrill's mortgage-related writedowns for the fourth quarter.
Merrill also said it would sell most of its commercial finance unit to GE Capital. Terms of the deal weren't made public.
Monday's gains have some investors hoping for a so-called Santa Claus rally _ a year-end surge that often extends into the new year and can burnish portfolios. On Friday, the Dow Jones industrial average rose more than 200 points and, along with the other major indexes, posted a gain of more than 1.5 percent for the session.
The Dow rose 89.58, or 0.67 percent, to 13,540.23.
Broader market indexes also advanced. The Standard & Poor's 500 index added 9.18, or 0.62 percent, to 1,493.64; and the Nasdaq composite index rose 13.61, or 0.51 percent, to 2,705.60.
Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.20 percent from 4.17 percent late Friday. The dollar was mixed against other major currencies, while gold prices rose.
The stock market closes three hours early at 1 p.m. EST, while the bond market closes at 2 p.m.
Light, sweet crude fell 70 cents to $92.61 on the New York Mercantile Exchange.
Merrill Lynch rose $2.30, or 4.2 percent, to $57.84 after selling a stake in itself to strengthen its balance sheet. It joins a number of other global banks _ including Citigroup Inc., UBS AG, and Morgan Stanley _to secure a capital infusion to diffuse losses from the credit crisis.
The largest U.S. brokerage also sold most of its commercial finance unit to GE Capital. Merrill Lynch Chief Executive John Thain, who took over the position last month, has said he plans to use asset sales to help streamline the company.


Updated : 2021-06-15 07:32 GMT+08:00