BLBG: U.S. Stocks Advance as Geithner Says Banks Have Enough Cash
By Rita Nazareth
April 21 (Bloomberg) -- U.S. stocks advanced, erasing an earlier slide, after Treasury Secretary Timothy Geithner said the “vast majority” of the nation’s banks have more capital than needed.
JPMorgan Chase & Co. and Wells Fargo & Co. rallied more than 5 percent, helping financial shares in the Standard & Poor’s 500 Index reverse a 4.1 percent drop and lead the market higher. Yahoo! Inc. added 5.7 percent, leading an advance in technology companies, on a Wall Street Journal report that it’s in talks about an advertising partnership with Microsoft Corp.
The Standard & Poor’s 500 Index rose 0.9 percent to 840.1 at 11:26 a.m. in New York after dropping as much as 0.7 percent earlier. The Dow Jones Industrial Average increased 58.54 points, or 0.8 percent, to 7,900.27. The Nasdaq Composite Index climbed 1.4 percent to 1,631.02.
“It’s coming directly out of Washington, Geithner’s testimony,” said Peter Kenny, a managing director of institutional sales at Knight Equity Markets in Jersey City, New Jersey. “He’s made clear that most of these banks have more than adequate capital. It means that we’re moving further down the road here, with healing the financial system and getting it back on track.”
The market’s earlier retreat came as companies from Bank of New York Mellon Corp. to Caterpillar Inc. posted earnings or forecasts that trailed analysts’ estimates.
Renewed concern that credit losses may worsen sent the S&P 500 tumbling the most in seven weeks yesterday. The index surged 29 percent from a 12-year low on March 9 through the end of last week as government efforts to fix the financial system and revive economic growth fueled speculation the first global recession since World War II will end.
Yahoo Rallies
Yahoo surged 78 cents to $14.44. The owner of the second- ranked U.S. search engine and Microsoft Corp. are in talks about a possible search and advertising partnership are being described as “hot and heavy”, the Wall Street Journal’s Boomtown reported, citing a person close to the situation.
Emulex Corp. surged 45 percent to $9.57. Broadcom Corp. offered to purchase the maker of components for data storage devices for $9.25 a share, or about $764 million, to add components that help computers store data.
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net.
