- The Washington Times - Monday, March 19, 2007

NEW YORK (AP) — Stocks spiked higher yesterday as Wall Street joined overseas markets in riding a wave of merger news to bounce back from a losing week. The Dow Jones Industrial Average rose 115 points.

The buyout news, particularly the possibility of an enormous deal that would unite Dutch bank ABN Amro Holding NV with British bank Barclays PLC, propelled stocks higher as investors theorized that companies remain upbeat about the economy if they are willing to cut new deals.

The advance began an important week for economic data. The first reading — a report from the Chicago Federal Reserve — said regional manufacturing slowed in January. The market was also waiting for today’s start of the U.S. Federal Reserve’s two-day meeting on interest rates.

The Dow rose 115.76, or 0.96 percent, to 12,226.17, its biggest one-day gain since March 6, when the index climbed more than 150 points.

Broader stock indicators also rose sharply. The Standard & Poor’s 500 Index gained 15.11, or 1.09 percent, to 1,402.06, and the Nasdaq Composite Index advanced 21.75, or 0.92 percent, to 2,394.41. The Russell 2000 Index of smaller companies rose 8.28, or 1.06 percent, to 787.05.

Bonds fell as stocks made gains. The yield on the benchmark 10-year Treasury note rose to 4.57 percent from 4.55 percent late Friday.

Stocks overseas rose sharply, even after China’s central banks raised interest rates to try to cool the economy. Japan’s Nikkei stock average rose 1.59 percent, Hong Kong’s Hang Seng Index advanced 1.65 percent, and the Shanghai Composite Index rose 2.87 percent. Britain’s FTSE 100 closed up 0.96 percent, Germany’s DAX added 1.39 percent, and France’s CAC-40 finished up 1.43 percent.

Investors seemed to look past a report from the Chicago Fed that found Midwestern manufacturing activity pulled back 2.3 percent in January from December to the weakest reading since October 2005.

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