(Updates to early morning, adds byline)
Mon Mar 24, 2008 10:29am EDT, YAHOO.
By Justin Grant
NEW YORK, March 24 (Reuters) - U.S. stocks rose on Monday on a surge in financial shares following news that JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) had boosted its offer to buy Bear Stearns Cos (BSC.N: Quote, Profile, Research) five-fold to $10 a share.
Investors warmed to the higher offer as it may avert a long shareholder battle and let JPMorgan close the deal sooner.
Sentiment received an added boost when the National Association of Realtors said the pace of existing home sales in the United States rose in February to a better-than-expected 5.03 million-unit annual rate. For more see [ID:nN24322776].
The Standard & Poor's index of financial shares climbed 2.5 percent. Shares of JPMorgan rose more than 2 percent to $47.00, while Bear's shares more than doubled to $12.53, well above the new offer price.
JPMorgan's original agreement on March 16 to pay $2 per share was considered a fire-sale price for the 85-year-old Wall Street investment bank which collapsed in a liquidity crisis after suffering large losses on soured subprime mortgage debt.
"The financials have been knocked down so much, there is going to be some good fundamental buying out there for some of these companies," said Stephen Carl, principal head of U.S. equity trading at The Williams Capital Group LP in New York.
"We'll see some kind of a turnaround." Continued...
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