Indexes up as liquidity boost, retail data help

NEW YORK - US stocks climbed on Monday as the worry that wracked Wall Street last week was soothed after central banks injected more cash into global financial systems and a report showed US retail sales grew last month.

By (Reuters)

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Published: Mon 13 Aug 2007, 8:34 PM

Last updated: Sat 4 Apr 2015, 9:21 PM

The stock market bounced back from several sharp declines last week on worsening lending conditions worldwide, sparked by the US subprime mortgage mess.

Shares of investment bank Goldman Sachs Group Inc. rose after the investment bank said it and outside investors would pour $3 billion of new capital into Goldman’s Global Equity Opportunities hedge fund, which had been hurt by recent volatility.

Retail sales rose more than expected in July, the Commerce Department said, which also revised June’s figures upward to show a smaller drop.

“Once again, you keep hearing the consumer is going to collapse. Our argument in this kind of employment market, where you have unemployment this low, you’re going to see people out there spending money,” said Scott Wren, senior equity strategist at A.G. Edwards & Sons Inc. in St. Louis.

The Dow Jones industrial average was up 76.74 points, or 0.58 percent, at 13,316.28. The Standard & Poor’s 500 Index

was up 10.87 points, or 0.75 percent, at 1,464.51. The Nasdaq Composite Index was up 25.73 points, or 1.01 percent, at 2,570.62.

Goldman rose 1.3 percent to $183.03.

Despite the improved mood on Wall Street, signs of trouble in the mortgage sector remained.

Accredited Home Lenders Holding Co. said on Monday it had sued private equity firm Lone Star Funds, seeking to force it to complete the $400 million takeover of the money-losing subprime mortgage lender.

Shares of Accredited tumbled 31.1 percent to $6.14.

The Federal Reserve added $2 billion in temporary reserves to the banking system through overnight repurchase agreements. Earlier the Bank of Japan and the European Central Bank announced they were pumping additional cash into banking systems. Hundreds of billions of dollars were added last week, halting a tumble by equity markets.

Shares of Blackstone Group rose after the private equity firm reported a near tripling of its quarterly net income. Blackstone shares rose nearly 3 percent to $26.08 on the NYSE.



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