US stocks rise on Dow acquisition, Bernanke testimonyJuly 11th, 2008 - 7:33 am ICT by IANS
New York, July 11 (DPA) Major US stock indices climbed Thursday as top US economic policy officials sought to allay mortgage-market concerns and called for more financial regulation, while Dow Chemical announced a $15-billion acquisition of rival Rohm & Haas. The stock gains came despite a $5 leap in the price of crude oil. Increases in metals prices spurred on producers.
Mortgage lenders Fannie Mae and Freddie Mac continued a week of steep share declines amid continuing concerns that they lack adequate capital to maintain operations.
The stock prices of the two government-chartered companies, which have already suffered billions of dollars in mortgage-related writedowns - as have countless other financial institutions - continued falling Thursday despite assurances from US officials and regulators that they were “adequately capitalized.”
Federal Reserve Chairman Ben Bernanke said he believed that Fannie Mae and Freddie Mac - which together own or guarantee about half of all US home loans - were “well capitalized” for the moment, but he included both of them in a “broad call for increased capital” across the industry.
Dow Chemical acquired its Rohm & Haas Co for about $15.4 billion in a deal backed by the Kuwait Investment Authority and US billionaire investor Warren Buffet.
The blue-chip Dow Jones Industrial Average rose 81.58 points, or 0.73 percent, to 11,1229.02. The broader Standard & Poor’s 500 Index was up 8.7 points, or 0.7 percent, to 1,253.39. The technology-heavy Nasdaq Composite Index jumped 22.96 points, or 1.03 percent, to 2,257.85.
The dollar fell to 63.36 euro cents from 63.52 euro cents on Wednesday but climbed to 107.07 Japanese yen from 106.72 yen.
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