With the DOW closing at 8848.15 up over 1%, will we hit 9,000 by the end of the week? Some annalists are saying the recession is nearing its end. Only time will tell. Read the article below.
NEW YORK (AP) -- Stocks are rising as investors are reassured by reports that commercial lender CIT Group has a deal with key bondholders that will help it avoid bankruptcy.
Stocks are following world markets higher and extending big gains logged last week after reports in The New York Times and The Wall Street Journal said CIT's board approved a deal with major bondholders to receive $3 billion in emergency funding.
Investors are also focused on the next wave of earnings reports from companies such as Boston Scientific and Texas Instruments.
A string of good earnings news sent market indicators up about 7 percent last week.
The Dow Jones industrials are up 52 to 8,796. The Standard & Poor's 500 index is up 4 to 945, and the Nasdaq composite index is up 6 to 1,893.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
NEW YORK (AP) -- Stock futures rose Monday as investors were reassured by reports that commercial lender CIT Group has a deal with key bondholders that will help it avoid bankruptcy.
U.S. futures followed world markets higher after reports in The New York Times and The Wall Street Journal said CIT's board approved a deal late Sunday with major bondholders to receive $3 billion in emergency funding. Both the Times and the Journal cited people familiar with the matter. CIT representatives could not immediately be reached for comment.
The money will give the troubled company time to restructure and pay down billions of dollars in debt due later this year.
CIT's future was cast in doubt after negotiations with federal regulators for bailout funds fell through. Its failure would have been a big blow to investor confidence and would have hurt industries like retailing, which has suppliers who reply on CIT for financing.
Investors are also focused on the next wave of earnings reports coming this week. On Monday, companies such as Boston Scientific Corp. and Texas Instruments Inc. are set to issue results.
A string of good earnings news sent market indicators up about 7 percent last week, giving the Dow Jones industrials and the Standard & Poor's 500 index their biggest weekly gains since early March, when the market's spring rally began.
The huge advance came after a monthlong slide in stocks that was driven by reports showing the economy was not healing as quickly as hoped. But solid earnings and outlooks from companies like Goldman Sachs Group Inc., Intel Corp. and International Business Machines Corp. gave investors hope that the recession is coming to an end.
Ahead of the market's open, Dow Jones industrial average futures rose 36, or 0.4 percent, to 8,733. Standard & Poor's 500 index futures rose 5.10, or 0.5 percent, to 942.00, while Nasdaq 100 index futures rose 2.50, or 0.2 percent, to 1,530.00.
Among the earnings news Monday, toy maker Hasbro Inc. said its second-quarter profit rose 5 percent, beating expectations, as strong U.S. revenue offset international sales hurt by the stronger dollar. Shares rose more than 3 percent, adding 87 cents to $26.25 in premarket trading.
Meanwhile, oilfield services company Halliburton Co. said its second-quarter profit tumbled 48 percent amid sluggish exploration and production activity. But results were better than analysts forecast and its shares rose 77 cents, or 3.6 percent, to $22.15.
Auto parts and building products maker Johnson Controls Inc.'s fiscal third-quarter earnings dropped 63 percent but exceeded expectations. Its revenue, however, fell short of analysts' estimates. Ahead of the market's open, shares added 87 cents, or 4 percent, to $22.39.
With the bulk of earnings reports still to come, the market has yet to hear from some key industries including retailing. If those results are disappointing, it could force investors to rethink their most recent rally. And the market still has a number of issues to deal with, including record-high unemployment and a damaged housing market.
"I would look for a little follow-through early this week that will hinge on quarterlies, but longer-term I think we'll see some pressure come back into this market," said Darin Newsom, senior analyst at DTN. "We're still going to have to see better employment and housing numbers."
On Monday, though, the CIT news and optimism over better earnings reports stoked investors' appetite for risk. Investors moved out of safe-haven assets like U.S. Treasurys and the dollar, and into riskier bets like commodities.
Oil prices jumped $1.12 to $64.68 in electronic trading on the New York Mercantile Exchange. Prices for gold, silver and copper also rose.
Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.67 percent from 3.66 percent late Friday.
And the dollar fell against other major currencies.
Except for a private sector group's report on economic activity, there is little economic data on tap for Monday. Economists are expecting the Conference Board's index of leading economic indicators to have risen 0.4 percent in June, which would mark the third straight monthly advance. The report is to be released at 10 a.m. EDT.
Overseas, Hong Kong's Hang Seng index jumped 3.7 percent. In afternoon trading, Britain's FTSE 100 was up 1.4 percent, Germany's DAX index rose 1.4 percent, and France's CAC-40 gained 1.5 percent. Japanese financial markets were closed for a holiday.
By Sara Lepro, AP Business Writer
On Monday July 20, 2009, 9:38 am EDT
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