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Bank of America Corporation Message Board

  • bluecheese4u bluecheese4u Mar 5, 2008 1:33 PM Flag

    Ambac gained 63 cents, or 5.9 percent, to $11.35 before trading was halted.

    Ambac gained 63 cents, or 5.9 percent, to $11.35 before trading was halted.

    U.S. Stocks Advance After ISM Report Tops Forecast; Ambac Gains

    By Elizabeth Stanton

    March 5 (Bloomberg) -- U.S. stocks posted their biggest gain in a week on a smaller-than-forecast decline in service industries and speculation banks will provide capital that bond insurers require to keep their AAA ratings.

    Wells Fargo & Co., Citigroup Inc. and Goldman Sachs Group Inc. led banks to their first gain in five days after CNBC reported, without citing anyone, that a rescue of Ambac Financial Group Inc. may be completed today. Energy and metal producers rallied, led by Chevron Corp. and Freeport-McMoRan Copper & Gold Inc., as oil rose above $104 a barrel and copper advanced.

    The Standard & Poor's 500 Index added 9.58 points, or 0.7 percent, to 1,336.33 at 1:11 p.m. in New York, briefly extending gains after the New York Stock Exchange halted Ambac trading for news. The Dow Jones Industrial Average advanced 65.13, or 0.5 percent, to 12,278.93. The Nasdaq Composite Index increased 21.42, or 1 percent, to 2,281.7. Two stocks rose for every one that fell on the NYSE.

    ``If we can get a deal done with Ambac Financial, that would be a first step to restoring confidence,'' Scott Richter, a portfolio manager at Fifth Third Asset Management in Cleveland, which oversees $21 billion, said in an interview on Bloomberg Television.

    Eight of 10 industries in the S&P 500 advanced after the Institute for Supply Management's non-manufacturing gauge rose almost five points to 49.3, just shy of the 50 threshold between contraction and expansion. The services index, which accounts for 90 percent of the economy, overshadowed a private report showing an unexpected decline in jobs and government data that showed a drop in factory orders.

    European stocks climbed for the first time in six days. Asian shares declined.

    Banks Rally

    Wells Fargo added 52 cents to $29.35. Citigroup climbed 32 cents to $22.42. Goldman added $1.59 to $165.19. The S&P 500 Financials Index climbed 1.2 percent, its first advance since Feb. 27.

    Ambac gained 63 cents, or 5.9 percent, to $11.35 before trading was halted. Citigroup Inc. and Barclays Plc are leading talks to boost the insurer's capital, CNBC said. Ambac shares have dropped 88 percent in the past year as it seeks to prevent a downgrade of its AAA rating following record losses on subprime guarantees. The loss of Ambac's top rating would cast doubt on $556 billion of municipal and asset-backed securities insured by the company, forcing some investors to sell the debt and others to reduce their holdings.

11.965+0.805(+7.21%)3:41 PMEST