Dow +189.20 (+1.53%)
Nasdaq +24.13 (+1.05%)
S&P 500 +18.69 (+1.38%)
News That Moved the Market
Disaster Averted, For Now. The markets were boosted Monday on news that ratings agency S&P took MBIA (MBI, +19.7%) off CreditWatch and assigned it a negative outlook. In addition, S&P affirmed its AAA rating on Ambac (ABK, +15.9%), but added the company was still on CreditWatch. The announcement by no means qualifies as a signal that all is now well, but was more of a sign that S&P was giving the bond insurers more time to sure up funds and a downgrade is not as imminent as some fear. Downgrades can still occur, but as long as these companies keep their AAA rating, banks do not have to writedown the securities backed by the monolines on their books.
Better Than Expected Housing Data. Existing home sales dropped 0.4% to an annual rate of 4.89 million, which was a 9-year low, but ahead of the 1.8% drop economists were expecting. Inventories of unsold homes increased to 10.3 months, still an enormous figure, but the better than expected data brought some hope that perhaps a bottom is nearing. Before the bell, Lowe's (LOW, +3.8%) reported a 33% decrease in net income and slashed its outlook, but the positive housing data allowed housing related companies to turn around and rally.
Getty Images Agrees to $2.1 Billion Buyout. Getty Images (GYI, +29.5%) agreed to be acquired by private-equity firm Hellman & Friedman LLC for $34/share. The purchase price represents a 55% premium from where Getty was trading when it announced it would be seeking strategic alternatives and could put itself up for sale on January 18th.
EA Makes Play For Take-Two. Take-Two Interactive (TTWO, +55.0%) rejected Electronic Arts' (EA, -5.2%) $26/share buyout bid, saying the bid undervalued the company. The $2 billion bid is not expected to be the last by EA, and the new price should come before April 29th, when Take-Two releases its newest installment of Grand Theft Auto.
Notable Earnings (Full List Here):
CBS (CBS) Before Open
Home Depot Inc (HD) Before Open
Macy's, Inc. (M) Before Open
Target Corporation (TGT) Before Open
Office Depot Inc. (ODP) Before Open
DreamWorks Animation SKG, Inc. (DWA) After Close
8:30 AM: PPI
10:00 AM: Consumer Confidence