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STOCKS NEWS US-Bank deal, bailout vote propel market gains

Fri, Oct 3 2008, 16:35 GMT
http://www.afxnews.com

NEW YORK (Thomson Financial) - Stocks on the move Real-Time Equity news

U.S. stock market report

1216 ET 03Oct2008-Bank deal, bailout vote propel market gains

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U.S. stocks advanced on Friday as Wells Fargo's proposed acquisition of

troubled U.S. bank Wachovia Corp lifted financial shares and the House

of Representatives readied to vote on a $700 billion plan to shore up financial

markets. Investors bet that the House, which earlier this week rejected the

legislation, would pass a revised bill to stabilize the U.S. financial sector.

A top Republican leader was optimistic the deal would pass. The deal between

Wells-Fargo, one of the strongest U.S. banks left, and Wachovia was a stock

transaction valued at more than $16 billion. It scuppered a deal announced on

Monday and backed by the government for Citigroup to buy parts of

Wachovia. For more please double click

Reuters Messaging rm://ellis.mnyandu.reuters.com@reuters.net

0855 ET 03Oct2008-Economic data likely to remain weak

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"The Sept employment report was remarkable for its broad-based weakness,"

says RBS Greenwich Capital's Alan Ruskin. "Unfortunately, all we have to look

forward to are much weaker numbers in the fourth quarter," he adds. That is so

even though the Wells Fargo-Wachovia merger is helping the stock market look

beyond the data to a crucial House vote on the $700 billion rescue plan. "Over

the past 10 days or so, markets have been driven far more by fear than by

economic conditions, but there's no reason to be extremely bullish on the

fundamentals," said Justin Wiggs, an equities trader at Stifel Nicolaus Capital

Markets.

Reuters Messaging rm://steven.c.johnson.reuters.com@reuters.net

0740 ET 02Oct2008-Bank merger, House vote could outweigh payrolls-strategist

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Combination of a Wells Fargo-Wachovia deal and House passage of the $700

billion rescue plan -- the latter still not a sure thing -- might be enough to

offset a weak payrolls number, says Miller Tabak & Co's Peter Boockvar. He says

Wells Fargo deal is encouraging, he says, because the bank is planning to buy

Wachovia with no help from the government. Greater consolidation in US banking

will help strong banks get their hands on large deposit bases, which "could

restore confidence and get banks lending again." He said he expects the House

to pass the bill, and says market may give weak jobs data "a free pass as the

market gives the bailout a brief honeymoon period."

Reuters Messaging rm://steven.c.johnson.com@reuters.net

Keywords: MARKETS STOCKSNEWS

Chuck Mikolajczak

cm

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