Stocks rally on Merrill news
The Russell 2000 (NYSE: IWM) and the Dow (INDU) are rallying after Merrill Lynch confirmed it will receive a cash injection from Singapore's state investment company and that the financial power house sold most of its commercial finance business.
At 11:02 a.m. ET, the small-cap index had added 4.87 points, or 0.62%, to 790.47. The Dow was up 75.98 points, or 0.56%, to 13,526.63.
Merrill, the world's largest brokerage firm, said in a statement today that it will receive a as much as $5 billion from Singapore’s Temasek and separately that New York- based Davis Selected Advisors LP will purchase a $1.2 billion stake.
The investments in Merrill are welcome news for jittery investors after the financial powerhouse clocked its biggest loss in its 93-year history in its latest quarter on account of bad bets on mortgage-backed securities.
Separately, Merrill also reported it will sell most of its commercial finance business to General Electric Co.'s finance arm for $10 billion in assets.
U.S. stocks gained for a third day, the longest stretch of advances in a month, on light volume, as investors hoped for a “Santa Clause” rally—a typical year end advance that comes with winding up positions for the year’s end and sometimes extends into January.
Stock exchanges, including the New York Stock Exchange, the Nasdaq capital and global markets and the American Stock Exchange will all be closing at 1 p.m. ET. today ahead of the Christmas holiday.
Markets in the U.K., Ireland, the Netherlands, Belgium and France also closed early, and all European and U.S. markets will be closed tomorrow.
In currency news, the yen toppled to a six-week low against the dollar and slid versus the euro as European and Asian stocks rose, propping up demand for higher-yielding assets funded by loans in Japan.
Separately, the price of a barrel of crude oil fell $0.75 to $92.56 mid-morning.
There are no economic news releases today due to the holiday.
Biggest percentage gainers:
• MTC Technologies Inc. (MTCT), up 32% to $23.48 on news that it received a $4.1 million Flexible Acquisition and Sustainment Tool task order to perform programmed depot maintenance on a Philippine Air Force C-130 Hercules aircraft.
• Bay National Corp. (BAYN), up 21.4% to $12.75.
• Barnwell Industries Inc. (BRN), up 18.7% to $10.79.
Biggest percentage losers:
• Consolidated Water Co. Ltd. (CWCO), down 23.2% to $24.85. on a Barron’s article on Sunday that said shares could fall by as much as half if it cannot resolve a dispute with one of its biggest customers
• Elecsys Corp. (ASY), down 12.7% to $5.15.
• Parkervision Inc. (PRKR), down 11% to $14.02.
