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US stocks flat as investors hope for Ambac capital injection

US stocks flat as investors hope for Ambac capital injection

Stocks were flat in early trading Monday as investors remained cautious while they waited to see whether ailing bond insurer Ambac Financial Group Inc. gets a capital injection.
There has been speculation that Ambac might find sufficient capital early this week to hold onto the stellar "AAA" rating it needs to remain in the municipal bond business. However, there was no confirmation that this was the case and the uncertainty began to gnaw at investors.
"Everyone is waiting to see how the Ambac matter comes out," said Peter Cardillo, chief market economist at Avalon Partners. "The fact that this is not a done deal is keeping the market a little on the defensive side."
The credit industry, already slammed by the summer's mortgage crisis, could face further erosion if bond insurers were to falter. Municipalities and companies used these insurers to back bonds, allowing them to get higher rating and cheaper financing.
The Dow Jones industrial average fell 4.07, or 0.03 percent, to 12,376.95.
Broader stock indexes also dipped. The Standard & Poor's 500 index fell 1.62, or 0.12 percent, to 1,351.49; and the Nasdaq composite index dropped 1.20, or 0.05 percent, to 2,305.15.
Despite continuing volatility, the stock market has traded in a range this month as investors hedge their bets as to whether troubled credit markets and the overall economy have stabilized.
Last week, the Dow inched up 0.27 percent, the S&P 500 index rose a modest 0.23 percent and the Nasdaq composite index dipped 0.79 percent. But the three indexes are all down sharply since the start of 2008.


Updated : 2021-04-22 23:31 GMT+08:00