NEW YORK (AP) - Stocks headed toward a higher open Monday as investors grew
upbeat over a report that Bear Stearns Cos. could fetch more money than the
amount set in a buyout deal a week ago.
Shares of Bear Stearns jumped more than 65 percent in premarket trading on a
report in the New York Times that JPMorgan Chase & Co. was in talks to boost its
offer to $10 per share from $2. The discussions were aimed at soothing Bear
Stearns shareholders upset over the JPMorgan's earlier offer, made at the behest
of the Federal Reserve when the investment bank was near collapse.
While the Fed would need to sign off on any changes to the deal, any sign
that Bear Stearns could fetch more than originally thought could help boost Wall
Street's mood. The session before the $2 offer arrived for Bear, the stock had
finished at $30.
Bear Stearns ran into trouble with mortgage-backed securities and an
evaporation of liquidity amid nervousness in the credit markets. Wall Street has
faced concerns for months that troubles with soured debt and a lack of liquidity
could take down banks.
Before the market opened Bear Stearns shares rose $3.89 to $9.85 in
electronic trading.
Beyond the troubles of the financials, Wall Street will also be looking at
the housing sector -- the root of much of Wall Street's current angst. A report
expected from The National Association of Realtors on February's sales of
existing homes is expected to show sales fell compared with January, according
to the median estimate of economists polled by Thomson Financial/IFR.
Dow Jones industrial average futures rose 84, or 0.68 percent, to 12,412.
Standard & Poor's 500 index futures advanced 12.10, or 0.91 percent, to
1,336.80. Nasdaq 100 index futures rose 10.20, or 0.58 percent, to 1,760.20.
The advance in futures follows a volatile but ultimately strong week for the
markets. The Dow and the S&P each showed gains of more than 3 percent for the
week, while the Nasdaq advanced more than 2 percent.
Bond prices fell Monday to 3.40 percent from 3.34 percent late Thursday. The
dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude fell $1.27 to $100.57 per barrel in premarket trading on
the New York Mercantile Exchange. Oil prices declined amid speculation that a
slowing U.S. economy could damp demand.
In corporate news, Tiffany & Co. said loans it made to a diamond company
weighed on its fourth-quarter profit, but that earnings excluding items were in
line with Wall Street's expectations.
Drugstore chain Walgreen Co. said its second-quarter earnings rose 5 percent
as it controlled expenses to offset slower sales growth.
Overseas, Japan's Nikkei stock average slipped 0.02 percent. Markets in
Europe and in Hong Kong were closed for Easter Monday.
Copyright 2008 Associated Press. All rights reserved. This material may not be
published, broadcast, rewritten, or redistributed.
|