Stock open higher after Dubai gets $10B bailout, Citigroup agrees to repay $20B to USBy Ieva M. Augstums, AP
Monday, December 14, 2009
Stocks push higher at open after Dubai, Citi deals
NEW YORK — Stocks got a boost early Monday after a bailout of the troubled emirate of Dubai helped allay concerns that another wave of global credit problems might be on the way.
Investors were also encouraged by the latest evidence of a rebound in big corporate dealmaking. Exxon Mobil Corp.’s $31 billion purchase of XTO Energy sent energy stocks sharply higher. The deal will help Exxon tap into the growing supply of natural gas in the U.S. and could signal more consolidation in the energy industry.
Stocks were already rising early Monday on news that Abu Dhabi had extended $10 billion to Dubai to help the debt-strapped Middle Eastern city-state stay afloat. Markets had been worried in recent weeks that debt problems in the struggling boomtown could send ripples through global credit markets.
In other positive news, banking giant Citigroup Inc. said it would pay back $20 billion in bailout money it received as part of the government’s financial rescue program. The government will also sell its 34 percent stake in the company. The news came just days after Bank of America Corp. repaid the entire $45 billion in bailout money it owed U.S. taxpayers.
The Dow Jones industrial average rose 15.04, or 0.1 percent, to 10,486.54. The Standard & Poor’s 500 index rose 3.38, or 0.3 percent, to 1,109.79, while the Nasdaq composite index rose 5.72, or 0.3 percent, to 2,196.03.
Bond prices were little changed. The yield on the benchmark 10-year Treasury note held steady at 3.55 percent.
The dollar fell against other currencies, helping to lift commodities prices. Commodities, which are priced in dollars, become cheaper for foreign buyers when the greenback falls.
Gold added $5 to $1,125 an ounce, while oil prices edged up 40 cents to $72.35 a barrel on the New York Mercantile Exchange.
In other trading, the Russell 2000 index of smaller companies rose 1.74, or 0.3 percent, to 602.11.
XTO shares shot up more than 15 percent following the acquisition news. Shares rose $6.50 to $47.99. Exxon shares fell $2.83, or 3.9 percent, to $70.
Citigroup shares slipped 20 cents, or 5.1 percent, to $3.75.
More than two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 142.8 million shares.
Overseas, Japan’s Nikkei stock average fell 0.2 percent. In afternoon trading, Britain’s FTSE 100 rose 1.0 percent, Germany’s DAX index was up 0.8 percent, and France’s CAC-40 gained 0.7 percent.
Tags: Citigroup, Commodity Markets, Dubai, Exxon mobil, Middle East, New York, North America, United Arab Emirates, United States, Xto energy