Stocks keep climbing

Major indexes enjoy lift from news that Merrill Lynch may sell stake in firm to foreign investor and impressive Research in Motion results.

Subscribe to Markets
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By David Ellis, CNNMoney.com staff writer

More on the markets
Wall Street looks like it could end a rough year with modest gains. These are the stocks and sectors that came out ahead - and far behind. (more)
What started out as a banner year for buyout deals quickly soured when the credit crisis hit. A look at the biggest stories of the year, and what's in store for 2008. (more)

NEW YORK (CNNMoney.com) -- Stocks moved steadily higher Friday encouraged by a report that banking giant Merrill Lynch may sell a stake in itself to a foreign fund and impressive earnings from BlackBerry maker Research in Motion.

The Dow Jones industrial average (INDU) gained about 1.2 percent an hour into the session.

The broader S&P 500 index (SPX.X) climbed nearly 1.3 percent, while the tech-fueled Nasdaq (COMPX) rose about 1.3 percent.

Helping stocks higher was news that Merrill Lynch (MER, Fortune 500), one of the investment banks hardest hit by the credit crisis, is in talks to nab a $5 billion investment from Singapore's state investment firm, Temasek Holdings, The Wall Street Journal reported. Such a sale would provide encouragement to investors worried about the health of the financial sector.

Also spurring the rise: Research in Motion (RIMM) said late Thursday that it more than doubled its third-quarter results, helped by robust demand for its BlackBerry smart-phones. Shares gained nearly 10 percent on the Nasdaq.

On the economic front, personal income and spending for November came in higher than expected, while a key reading on inflation provided a mixed picture.

The core PCE reading, which strips out volatile food and energy costs and is favored by the Federal Reserve as a measure of inflation, rose 0.2 percent during the month, as expected. But for the year, core inflation is now running at 2.2 percent, higher than the 2 percent expected.

Treasury prices retreated as the yield sending the benchmark 10-year note to 4.07 percent from 4.03 percent in the previous session.

The Federal Reserve said Friday it lent another $20 billion to banks at an interest rate of 4.67 percent as part of its continuing effort to fire up the credit markets.

The central bank said it received a bid for $57.7 billion worth of loans, illustrating strong demand by banks that need short-term funds, adding that it planned to conduct these biweekly auctions for as long as necessary to help alleviate the credit crunch.

In other corporate news, Philips (PHG) of the Netherlands said it has agreed to acquire Respironics (RESP), which specializes in ways to combat sleep disorders, for $5.1 billion.

Consumer electronics retailer Circuit City (CC, Fortune 500) reported a wider-than-expected third-quarter loss blaming the dismal results on ongoing store reorganization and double-digit sales declines of gadgets like camcorders and DVD players. Shares of the retailer plunged 23 percent in morning trading.

And insurance broker Marsh & McLennan (MMC, Fortune 500) said it is looking to replace its chief executive after concerns over the company's recent financial performance.

Commodity prices were higher Friday as U.S. light crude for February gained 84 cents to $91.90 a barrel on the New York Mercantile Exchange.

COMEX gold for February rose $12 to $815.20 an ounce.

Overseas, Asian markets finished higher, while European stocks followed in midday trading.

The dollar was lower versus the euro and eased against the yen. To top of page

Photo Galleries
7 epic gadget flops From the Microsoft Zune to the BlackBerry PlayBook, the Fire Phone is following in some unfortunate footsteps. More
What I gave up to save $1 million They may have million dollar-plus nest eggs, but they had to make some big sacrifices along the way to get there. Here's what these four savers did without in order to save seven-figures retirement. More
World's Top Employers for New Grads For an exclusive CNNMoney list, research firm Universum Global surveyed college students around the world to see where they most want to work. More
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.