(Updates to early morning)
By Jennifer Coogan
NEW YORK, Feb 25 (Reuters) - U.S. stocks rose on Monday on
deal news in the media technology sector and optimism about a
possible rescue plan for a bond insurer, offsetting worries
about more big debt write-downs by banks and brokers.
The media technology sector got a boost from takeover
activity.
Video game publisher Electronic Arts Inc <ERTS.O> made an
unsolicited $1.9 billion offer for smaller rival Take-Two
Interactive Software <TTWO.O> on Sunday.
In addition, digital image provider Getty Images Inc
<GYI.N> said it agreed to be bought by Hellman & Friedman
affiliates in a deal it said was worth $2.4 billion.
Take-Two shares surged more than 47 percent to $25.56 and
Getty shares jumped more than 31 percent to $32.13.
Shares of Citigroup Inc <C.N> were the top drag on the S&P
500 after Goldman Sachs said it expects the bank to write down
an additional $12 billion in debt related to bad mortgage and
other loans. Goldman said it also sees more write-downs from
JPMorgan Chase & Co <JPM.N>, Merrill Lynch & Co Inc <MER.N> and
Morgan Stanley <MS.N>
But in an encouraging credit-market sign, Dresdner Bank
said on Monday it intends to support a rescue package for Ambac
Financial Group Inc <ABK.N> that could shore up the balance
sheet of the monoline insurer and preserve its top credit
rating.
"Even if this monoline situation is clarified, I don't
think that's the end of the story," said Michael Metz, chief
investment strategist at Oppenheimer & Co in New York. "It
seems almost everyday someone discovers additional write-downs.
Nobody can quantify it completely."
The Dow Jones industrial average <> was up 88.90
points, or 0.72 percent, at 12,469.92. The Standard & Poor's
500 Index <.SPX> was up 7.92 points, or 0.59 percent, at
1,361.03. The Nasdaq Composite Index <> was up 16.55
points, or 0.72 percent, at 2,319.90.
In economic news, stocks showed muted reaction shortly
after the open after data showed existing home sales fell in
January in line with economists' expectations.
Ambac shares rose 2 percent to $10.88 after giving a boost
to markets on late on Friday on talk that the rescue plan would
be announced soon.
General Motors Corp <GM.N> shares were the biggest drag on
the Dow after Deutsche Bank cut its rating on the automaker,
according to theflyonthewall.com.
Citigroup shares were down 2.6 percent to $23.45 and
JPMorgan stock was down 1.7 percent to $43.19.
Oppenheimer also cut its earnings outlook on a handful of
banks, including Bank of America <BAC.N>, Citigroup <C.N>,
Wells Fargo & Co <WFC.N>.
Genentech Inc <DNA.N> shares rose 9.5 percent to $78.38
following news late Friday that U.S. regulators had approved
the company's cancer drug, Avastin, for the treatment of breast
cancer. For details, see []
(Editing by Kenneth Barry)
