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Midday Market Update: Markets Extend Prior Week’s Gains

By Jennifer Yousfi
Managing Editor

The U.S. markets extended last week’s gains on news that the largest U.S. savings and loan was close to securing a deal to receive much-needed capital.

At midday in New York, the blue-chip Dow Jones Industrial Average Index was up 68.88 points (0.55%), to trade at 12,678.30. The tech-laden Nasdaq Composite Index increased 9.67 points (0.418%), to reach 2,380.65. And the broader Standard & Poor’s 500 Index rose 9.07 points (0.66%), to hit 1,379.47.

The basic materials sector (up 2.09%) and the energy sector (up 1.54%) posted the biggest gains, while the consumer non-cyclical sector (down 0.07%) posted the only decline.

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Shares Washington Mutual Inc. (WM) surged over 20% by midday on news that the mortgage lender is close to a deal with private equity firm TPG Inc. that would boost its balance sheet by $5 billion.

Seattle-based WaMu, as the thrift is often called, is the latest financial firm to seek an outside capital infusion due to heavy subprime-related losses.

Citigroup Inc. (C) analysts upgraded projections for copper, nickel, lead and aluminum, Bloomberg News reported, causing shares of Newmont Mining Corp. (NEM) and other members of the S&P 500’s Materials Index to head higher.

In overseas markets, Japan’s Nikkei Index gained 157.01 points to close at 13,450.23. Hong Kong’s blue-chip Hang Seng Index had a 314.13-point increase, to close at 24,578.76.

European bourses were up with the Paris-based CAC40, London’s FTSE 100, Madrid’s IBEX 35 and the Frankfurt-based DAX all posting gains.

At midday, the dollar had lost ground against the euro (down 0.019%), but gained ground against the yen (up 0.915%) and the pound sterling (up 0.010%).

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