(Updates with S&P up 1 percent)
By Cal Mankowski
NEW YORK, April 7 (Reuters) - U.S. stocks jumped on Monday,
pushing the S&P 500 index up 1 percent, as news that Washington
Mutual Inc <WM.N>, is close to securing a $5 billion cash
infusion bolstered hopes that the credit crisis is easing and
drove up financial shares.
Shares of WaMu, the largest U.S. savings and loan company
and one of the largest U.S. mortgage lenders, surged by more
than one third, while the S&P financial index <.GSPF> rose 2.52
percent.
Washington Mutual is close to obtaining $5 billion from
U.S. private equity firm TPG and other investors, people
familiar with the situation said on Monday. An investment would
ease the thrift's need for capital as losses from subprime
mortgages and other loans soar. For details see
[].
"I think it's another manifestation of the defrosting of
the credit freeze and the money the Fed is pumping into the
system eventually finding its way to where it is intended to
benefit, and that's the financial area," said Ned Riley, chief
executive of Riley Asset Management in Marshfield,
Massachusetts.
The Dow Jones industrial average <> was up 106.49
points, or 0.84 percent, at 12,715.91. The Standard & Poor's
500 Index <.SPX> was up 14.25 points, or 1.04 percent, at
1,384.65. The Nasdaq Composite Index <> was up 14.31
points, or 0.60 percent, at 2,385.29.
A rise in energy shares as the price of crude oil gained
also buoyed markets. Shares of Exxon Mobil Corp <XOM.N> rose
1.3 percent to $89.90 and Chevron <CVX.N> rose 1.4 percent to
$89.28.
"Energy stocks are moving in concert with the price of oil,
which defies logic, common sense and the laws of gravity when
one looks at the surplus inventory in crude and gasoline
worldwide and the lack of economic growth," Riley said.
Shares of Citigroup Inc <C.N> rose 4 percent to $25.06
after agreeing to sell its Diners Club International operations
for $165 million to Discover Financial Services <DFS.N>.
Financials were also higher in Europe after Merrill Lynch
raised Swiss bank UBS <UBSN.VX><UBS.N> to a "buy."
WaMu shares were up 35 percent to $13.73 on the New York
Stock Exchange. The shares on Friday had skidded more than 11
percent on Friday after analyst Frederick Cannon at Keefe,
Bruyette & Woods Inc forecast a bigger 2008 loss and the
prospect of no profit before 2010.
Investors also snapped up technology shares.
Brokerage Thomas Weisel, according to theflyonthewall.com,
raised its rating on Apple Inc <AAPL.O> to "overweight" from
"market weight."
Apple shares rose 4 percent to $158.88.
Microsoft Corp <MSFT.O> shares rose 0.2 percent to $29.23
after Yahoo Inc <YHOO.O> said it does not oppose the software
maker's bid for the Internet media company as long as it is at
the right price. [].
Yahoo's response to Microsoft came two days after the
software maker gave Yahoo three weeks to accept a $31 a share
cash-and-stock offer or risk either Microsoft slashing its bid
or going directly to Yahoo investors.
Yahoo shares fell 1 percent to $28.07.
(Additional reporting by Ellis Mnyandu; Editing by Leslie
Adler)
