Wall Street rebounds, boosted by banking giants

January 17th, 2009 - 12:27 am ICT by IANS  

New York, Jan 16 (Xinhua) Wall Street perked up Friday, as upbeat news from Bank of America and Citigroup boosted market sentiment. Concerns about the health of the banking system were eased, after Bank of America received a $138 billion government aid to avoid bankruptcy.

The US government agreed to invest $20 billion in Bank of America and guaranteed $118 billion of assets to help the lender absorb Merrill Lynch.

In another development, Citigroup Friday announced that it would split into two businesses: Citicorp, which will focus on traditional banking, and Citi Holdings that would deal with company’s assets.

The change delighted investors, as many have called for the end of the “super bank” model for years.

Citi also reported a fourth-quarter net loss of $8.29 billion, the fifth straight quarterly loss.

The market seemed unfazed after the US Labour Department said consumer prices dropped by 0.7 percent in December and edged up by 0.1 percent in 2008, the smallest annual change since 1954.

The Dow Jones rose 98.92 to 8,8311.41. Broader indexes also moved higher. The Standard & Poor’s 500 index rose 11.27 to 855.01 and the Nasdaq climbed 14.32 to 1,526.16.

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