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US stocks up on prospect of Lehman buyout

US stocks up on prospect of Lehman buyout

Stocks rose sharply in early trading Friday as oil retreated from this week's rally and as speculation grew that Lehman Brothers Holdings Inc. could be sold. The Dow Jones industrial average rose more than 100 points.
Worries about the embattled Lehman re-emerged this week as analysts lowered their estimates for the investment bank and forecast large additional write-downs. However, a Ladenburg Thalmann analyst upgrade on Lehman to "buy" helped stocks finish mixed on Thursday; he said he believed Lehman has become a hostile takeover candidate.
And on Friday, after the previous day's media reports that discussions between Lehman and a group of Korean banks had fallen through, another media report emerged that Korea Development Bank is considering buying the company. Lehman rose $1.47, or 11 percent, to $15.19 in early trading.
Investors were also awaiting a speech by Federal Reserve Chairman Ben Bernanke, who is scheduled to appear at 10 a.m. Eastern time at the Kansas City Fed's annual economic symposium in Jackson Hole, Wyo. Investors will be looking for insight into the current state of the banking system _ which has become an even bigger concern as of late, on speculation that mortgage financiers Fannie Mae and Freddie Mac might need a government bailout.
In the first hour of trading, the Dow Jones industrial average rose 117.49, or 1.03 percent, to 11,547.70.
Broader stock indicators also rose. The Standard & Poor's 500 index rose 10.48, or 0.82 percent, to 1,288.20, and the Nasdaq composite index rose 20.27, or 0.85 percent, to 2,400.65.
Light, sweet crude oil prices fell $2.26 to $118.92 a barrel on the New York Mercantile Exchange, after surging by more than $5 a barrel on Thursday.
Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.87 percent from 3.83 percent late Wednesday.
The dollar rose against other major currencies, while gold prices fell.
In earnings news, Gap Inc. rose 95 cents, or 5 percent, to $19.96 after reporting late Thursday that profits in the most recent quarter rose 51 percent from a year earlier, thanks to tight inventory and cost control. The results were better than expected.
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Updated : 2021-07-24 01:25 GMT+08:00