Wall Street Rebounds on Chemical Deal

Wall Street gained on Thursday as the Dow Chemical's multi-billion dollars offer to buy rival Rohm and Haas overshadowed the worrying financials and surging oil prices.

Dow Chemical's 15 billion U.S. dollars all-cash deal for the specialty chemicals Rohm and Haas gave stocks a big boost. Dow will acquire Rohm & Haas for 78 U.S. dollars per share, a 74 percent premium to the stock's close of 44.83 dollars a share Wednesday.

The financials declined after U.S. Treasury Secretary Henry Paulson told the Congress that the market can't expect the government to bail out troubled financial companies.

Fannie Mae and Freddie Mac, the two largest providers of financing for U.S. home mortgages, tumbled to the lowest in 17 years. Wachovia Corp., the fourth largest U.S. bank, dropped after Deutsche Bank said it isn't a buyout target. Investment banks were also weak with Lehman Brothers Holdings Inc. fell sharply with a loss of more than 11 percent.

Crude prices rebounded sharply Thursday on tensions in the Middle East that stirred by Iran's missile testing. Oil futures soared more than 5 dollars to 141.65 dollars a barrel on the New York Mercantile Exchange. The market has been highly sensitive in recent months to sharp moves in the price of oil.

In corporate news, Wal-Mart, the world's biggest retailer, reported stronger-than-expected sales for June due to the government's stimulus package, and it raised its outlook for the current quarter. Costco Wholesale Corp. fell 81 cents to 71.34 dollars after reporting that its same-store sales rose 9 percent in June including sales of gasoline.

The Dow Jones rose 81.58 to 11,229.02. Broader indexes also moved higher. The Standard & Poor's 500 index climbed 8.71 to 1, 253.39; and the Nasdaq rose 22.96 to 2,257.85.

Source: CRIEnglish