Friday, 21 November 2008

Bargain hunters lift stocks, but Citi sinks

NEW YORK (Reuters) - Stocks rose in choppy trade on Friday as investors snapped up cut-price shares in beaten down sectors, including commodities and energy, a day after Wall Street slid to 11-year lows.

Even so, fresh worry about the future of embattled No. 2 U.S. bank Citigroup limited a broad market advance as the stock dragged on financials and pushed Citigroup to around 15-year lows.

Citigroup shares tumbled about 16 percent to $3.94 following news reports that the company is considering selling pieces of its business or the entire company outright.

Shares of energy companies, helped cushion both the Dow and the S&P 500, with Exxon Mobil up more than 3 percent.

The S&P energy index was up 3.2 percent, with all but three of the index's 41 components higher.

"The market is very oversold and bouncing off the recent multi-year lows," said Matt McCall, president of Penn Financial Group in Ridgewood, New Jersey. "With regards to Citigroup, unless something changes dramatically, they're going to end up being broken up or somebody flat out taking them over."

The Dow Jones industrial average gained 35.84 points, or 0.47 percent, to 7,588.13. The Standard & Poor's 500 Index rose 1.78 points, or 0.24 percent, to 754.22. The Nasdaq Composite Index edged up 3.76 points, or 0.29 percent, to 1,319.88.

On Nasdaq, shares of Microsoft , which is also a Dow component, jumped nearly 7 percent to $18.70, making the stock a top boost after a Oppenheimer & Co, a brokerage, raised its rating on the software maker.

Besides Citigroup, shares of JPMorgan declined 11.4 percent to $20.77 and Bank of America shed 7.5 percent to $10.40.

Goldman Sachs, meanwhile, cut its outlook on the U.S. economy, forecasting it would contract by 5 percent at an annual rate in the current quarter and unemployment rate would soar to 9 percent by late 2009 from 6.5 percent in October.

The failure of U.S. automakers, including General Motors Corp, to secure an immediate government bailout to avert possible bankruptcy linger, also contributed a negative tone.

Shares of Wal-Mart Stores Inc rose 1.7 percent to $51.54 after the world's largest retailer said Lee Scott was retiring as chief executive and it named Mike Duke, who heads Wal-Mart's international operations, as his successor.

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