Stocks push higherInvestors welcome a smaller-than-expected drop in existing home sales and consider the prospect of an Ambac bailout.NEW YORK (CNNMoney.com) -- Stocks advanced Monday morning as investors welcomed a report that showed a smaller-than-expected decline in existing home sales and looked to a potential bailout for troubled bond insurer Ambac Financial. The Dow Jones industrial average (INDU), the broader Standard & Poor's 500 (SPX) index and the Nasdaq composite (COMP) all gained about 0.6% nearly 2 hours into the session. The National Association of Realtors said existing home sales fell to a 4.89 million unit annual pace in January, down from a revised 4.91 million unit annual pace in December. Sales fell to the lowest level in nearly a decade, but the reading came in better than expected, helping lift sentiment. Economists had forecast sales to decline to a 4.8 million unit annual pace. Troubled bond insurer Ambac reportedly could reach an agreement as early as today with a group of banks on a plan to raise capital to shore up its business, which also helped lift sentiment. However, at least one analyst said that the capital wouldn't be enough to prevent Ambac from having its financial strength rating downgraded. Ambac (ABK) rose 1.5%. Corporate news. Investors also cheered a slew of merger deals. Getty Images, which sells photography and video images, agreed to be bought for $2.1 billion by private-equity firm Hellman & Friedman LLC. Getty (GYI) shares jumped 33%. Electronic Arts (ERTS) made an unsolicited $2 billion offer for gaming competitor Take-Two Interactive (TTWO), saying it was seeking to go to shareholders after Take-Two's board turned down two previous offers over the last two weeks. Take-Two shares skyrocketed 51%. On the earnings front, home improvement retailer Lowe's (LOW, Fortune 500) shares rose 5%, despite reporting weak quarterly results. Lowe's posted a lower fourth-quarter profit and said it expects 2008 results that are short of expectations. Genentech (DNA) shares soared 10%. The Food and Drug Administration approved on Friday the drugmaker's Avastin for the treatment of breast cancer. (Full story). Citigroup (C, Fortune 500) slipped after Goldman Sachs cut its earnings outlook for the financial company, predicting it would need to take more writedowns related to bad mortgage bets. Goldman also cut its forecasts on a number of other big banks, the AP reported. Market breadth was positive. On the New York Stock Exchange, winners beat losers three to two on volume of 430 million shares. On the Nasdaq, advancers topped decliners four to three on volume of 720 million shares. Other markets. U.S. light crude oil for April delivery rose 19 cents to $99 a barrel on the New York Mercantile Exchange. COMEX gold for April delivery fell $6.80 to $941 an ounce. Treasury prices slipped, raising the yield on the benchmark 10-year note to 3.87% from 3.8% late Thursday. Bond prices and yields move in opposite directions. In currency trading, the dollar gained versus the euro and the yen. |
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