U.S. Stocks Rise on Speculation Congress Is Near Bailout Plan

U.S. stocks climbed as speculation Congress will agree on a $700 billion bank bailout spurred a late-day rally in financial shares, paring losses in the worst week for the Standard & Poor's 500 Index since February.

Wells Fargo & Co. rallied 11 percent, Bank of America Corp. climbed 8 percent and JPMorgan Chase & Co., which raised $10 billion in a stock sale today, advanced 7.3 percent as lawmakers said they will not adjourn until an agreement on the rescue plan is reached. Research In Motion Ltd. tumbled the most in eight years, dragging down the Nasdaq Composite Index, after forecasting earnings that trailed analysts' estimates.

The S&P 500 increased 3.24, or 0.3 percent, to 1,212.42 at 3:57 p.m. in New York. The Dow Jones Industrial Average jumped 117.48, or 1.1 percent, to 10,1139.54. The Nasdaq Composite Index dropped 1.74, or 0.1 percent, to 2,184.83.

The S&P 500 pared its weekly decline to 3.5 percent and the Dow trimmed its loss for the week to 2.3 percent. Stocks climbed for the first time in four days yesterday as speculation grew that Congress would reach agreement on the bank bailout plan.

WaMu, which traded for more than $35 a year ago, plunged $1.53 to 16 cents. JPMorgan added $4.09 to $47.55. Customers of WaMu withdrew $16.7 billion from accounts since Sept. 16, leaving the Seattle-based bank ``unsound,'' the Office of Thrift Supervision said late yesterday. The takeover gives JPMorgan about $900 billion in deposits and 5,400 bank branches nationwide. WaMu rejected JPMorgan's March takeover bid at $4 a share.

Brazilian stocks tumbled, capping the first weekly decline in three, after two of the nation's biggest exporters posted currency losses and ousted their chief financial officers, raising concern more companies may follow. The Bovespa index dropped 2.8 percent to 50,368.21 at 3:35 p.m. New York time. The measure fell 5 percent so far this week.

Earlier, U.K. stocks dropped, led by banks, after negotiations on the $700-billion plan to bail out financial markets in the U.S. stalled. The benchmark FTSE 100 index fell 108.55, or 2.09 percent, to 5,088.47 as of 4 p.m. in London, headed for a weekly loss of 4.2 percent.

Russian stocks slumped, led by financial shares, after Moody's Investors Service assigned a ``negative'' outlook to the country's banking system as it grapples to contain its worst crisis since the 1998 default. The Micex Index of 28 companies declined 1.5 percent to 1,079.04 at the close in Moscow, extending its 2008 retreat to 43 percent

China's stocks rose, with the benchmark index advancing for the first week in nine, after the government stepped up support for the world's second-worst performing market this year. The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, advanced 20.13, or 0.9 percent, to 2,243.66 at the close.

Indian stocks fell, with the benchmark posting its biggest weekly drop in six months, after talks on a U.S. credit market rescue plan stalled and Washington Mutual Inc. became the biggest bank failure in American history. The Bombay Stock Exchange's Sensitive Index, or Sensex, fell 445, or 3.3 percent, to 13,102.18.

Japan's Nikkei 225 Stock Average lost 0.9 percent to 11,893.16. New Zealand's NZX 50 Index declined 1.6 percent after the economy contracted in the second quarter, driving the nation into its first recession in a decade.

TradingEconomics.com, Bloomberg.com
9/26/2008 1:14:56 PM