Dec. 24 -- U.S. stocks rose, sending benchmark indexes to the highest levels in two weeks, after falling interest rates and an agreement to restructure $33.3 billion of Canadian commercial debt improved the outlook for credit markets.
SLM Corp., Citigroup Inc. and American International Group Inc. carried financial shares to the steepest gain in the Standard & Poor's 500 Index as banks' borrowing costs decreased for a fifth day. Target Corp. led retailers higher after activist investor William Ackman said he held talks with management about boosting the stock price.
The S&P 500 increased 11.99, or 0.8 percent, to 1,496.45, bringing its yearly gain to 5.5 percent. The Dow Jones Industrial Average advanced 98.68, or 0.7 percent, to 13,549.33. The Nasdaq Composite Index added 21.51, or 0.8 percent, to 2,713.50. More than 11 stocks gained for every three that fell on the New York Stock Exchange. Stocks in Asia and Europe also climbed.
``The fact that we're seeing the availability of credit come back, it gets us past the point of a banking crisis and that's really what the central banks wanted to see,'' said Peter Sorrentino, who helps manage $12 billion at Huntington Asset Management in Cincinnati.
The cost of borrowing dollars, euros and pounds declined, signaling action by central banks to boost lending in money markets is working. The three-month euro interbank offered rate, or Euribor, dropped 0.01 point to just over 4.76 percent, the lowest since Nov. 28, the European Banking Federation said. The three-month rate for dollars declined 0.02 point to 4.84 percent, the British Bankers' Association said.
Canada Commercial Paper
In addition, investors in Canada agreed to lengthen maturities on C$33 billion ($33.3 billion) of asset-backed commercial paper. The accord enables the market for the securities to open for the first time since August.
Today's trading session was the slowest this year with about 537 million shares changing hands on the New York Stock Exchange. U.S. exchanges closed three hours early and will remain shut tomorrow for Christmas. Markets including Germany, Italy, Spain, and Switzerland were closed today, while bourses in the U.K., Ireland, the Netherlands, Belgium and France shut early.
Financial shares in the S&P 500 added 1.8 percent, the steepest among 10 industries. AIG led gains in the Dow average, advancing $1.65, or 2.8 percent, to $59.98. SLM and Citigroup joined AIG in contributing the most to the rally by banks, brokerages and other financial institutions, climbing 11 percent and 2.5 percent, respectively.
Singapore Sovereign Fund
Merrill Lynch & Co. slumped $1.64, or 3 percent, to $53.90 after agreeing to sell a stake of up to $5 billion to Temasek Holdings Pte., a Singapore sovereign wealth fund. Temasek will pay $48 a share, almost 14 percent less than the Dec. 21 closing price.
Merrill, the world's largest brokerage, also said New York- based money manager Davis Selected Advisors LP will buy a $1.2 billion stake and General Electric Co.'s finance arm will purchase Merrill's commercial finance business for an undisclosed price. The fresh capital comes after Merrill posted the biggest loss in its 93-year history.
Target added $1.79 to $52.47. Ackman increased his stake to 10 percent, up from 9.6 percent earlier. Retailers in the S&P 500 rose 1.6 percent.
Alcoa Inc. climbed for a fifth day, the longest streak of gains since July, advancing 66 cents to $37.01. The world's third-largest maker of aluminum agreed to sell businesses that include its Reynolds Wrap foil to New Zealand's Rank Group Ltd. for $2.7 billion to focus on more profitable metal production.
`America is for Sale'
``America is for sale,'' said Robert Stovall, who helps oversee $1.6 billion as global strategist at Wood Asset Management Inc. in Sarasota, Florida. ``Prices are down on our securities, particularly financials, and the dollar is weak and liquidity is sloshing around worldwide.''
Teva Pharmaceutical Industries Ltd., the world's biggest maker of generic drugs, rallied $1.31 to a record $46.48 after raising its 2007 profit forecast. Teva plans to start selling a copycat version of Wyeth's heartburn medicine Protonix.
Wyeth fell the most since Nov. 8, losing $1.41, or 3 percent, to $45.45. U.S. regulators delayed its experimental drug for preventing bone loss.
United Rentals Inc. snapped a four-day stretch of declines, adding 79 cents to $18.70. The largest U.S. construction equipment rental company said it will accept a judge's ruling that Cerberus Capital Management LP had the right to break off a $4 billion takeover and will seek payment of a $100 million termination fee.
CME Group Declines
CME Group Inc. slipped $16.75 to $694. JPMorgan and Deutsche Bank AG are among companies planning to start an exchange to compete with CME, operator of the world's largest futures exchange, the Wall Street Journal reported on Dec. 21, citing unidentified people familiar with the matter.
The Russell 2000 Index, a benchmark for companies with a median market value of $610 million, gained 1.1 percent to 794.39, the highest since Nov. 6. The Dow Jones Wilshire 5000 Index, the broadest measure of U.S. shares, rose 0.8 percent to 15,110.89. Based on its advance, the value of stocks increased by $164.5 billion.
Alcoa Inc. (AA US)
American International Group Inc. (AIG US)
Citigroup Inc. (C US)
CME Group Inc. (CME US)
General Electric Co. (GE US)
Merrill Lynch & Co. (MER US)
SLM Corp. (SLM US)
Target Corp. (TGT US)
Teva Pharmaceutical Industries Ltd. (TEVA US)
United Rentals Inc. (URI US)
Wyeth (WYE US)
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