(Updates to early morning, adds byline)
By Ellis Mnyandu
NEW YORK, April 7 (Reuters) - U.S. stocks rose on Monday as
financial stocks gained on news that Washington Mutual Inc
<WM.N> is close to securing a $5 billion cash infusion that may
allay worries about mortgage losses at the largest U.S. savings
and loan company.
The investment in Washington Mutual could add to market
hopes that banks and other financial companies may have seen
the worst of the credit crisis, and investors are jockeying to
snap up bargains in the downtrodden financial sector.
Washington Mutual shares jumped more than 16 percent after
a source familiar with the situation said that U.S. private
equity firm TPG and other investors were near a deal to invest
in the company. For details see []. A deal could
come as early as Monday.
Citigroup Inc <C.N> was among the standouts, with its stock
up more than 3 percent after the largest U.S. bank agreed to
sell its Diners Club International operations for $165 million
to Discover Financial Services <DFS.N>. Financials were also
higher in Europe after Merrill Lynch raised Swiss bank UBS
<UBSN.VX><UBS.N> to a "buy."
"What's helping financials is that the crisis of the
availability of capital is maybe not as bad as before," said
Subodh Kumar, chief investment strategist at Subodh Kumar &
Associates in Toronto, Canada.
"Financials are early cycle leaders and the news is
consistent ... People are willing to step up to the plate to
supply capital and liquidity to the financials."
The Dow Jones industrial average <> climbed 51.21
points, or 0.41 percent, to 12,660.63. The Standard & Poor's
500 Index <.SPX> gained 7.89 points, or 0.58 percent, to
1,378.29. The Nasdaq Composite Index <> advanced 11.14
points, or 0.47 percent, to 2,382.12.
The market also got a boost from energy shares including
Exxon Mobil Corp <XOM.N> due to higher oil prices, at $109 a
barrel.
Washington Mutual shares climbed to $11.88 on the New York
Stock Exchange, marking a recovery after a slide of more than
11 percent on Friday when an analyst at Keefe, Bruyette & Woods
Inc forecast a bigger 2008 loss and the prospect of no profit
before 2010.
Citigroup shares climbed to $24.92 on the NYSE, making the
stock the S&P 500's top gainer, ahead of Exxon Mobil, whose
stock rose 0.8 percent to $89.50.
Investors also snapped up technology shares.
Brokerage Thomas Weisel, according to theflyonthewall.com,
raised its rating on Apple Inc <AAPL.O> to "overweight" from
"market weight."
Apple shares were the top Nasdaq gainer, up 2.4 percent at
$156.73, followed by Microsoft Corp <MSFT.O>, whose stock rose
nearly 1 percent to $29.45 after Yahoo Inc <YHOO.O> said it
does not oppose the software maker's bid for the Internet media
company as long as it is at the right price. [].
Yahoo's response to Microsoft came two days after the
software maker gave Yahoo three weeks to accept a $31-a-share
cash-and-stock offer or risk either Microsoft slashing its bid
or going directly to Yahoo investors.
(Editing by James Dalgleish)
