Dow ends day with a triple-digit gain with 28 components supporting it

Mergers and buyout news took centrestage today, Wednesday, 22 August, 2007, pushing the recent credit-crunch related news to the backside. The market also heaved a sigh of relief in the belief that the situation in the credit market is not so bad on getting news that top banks have borrowed money from the Fed’s discount window after the rate cut. All three indices closed in the green.

The Dow Jones Industrial Average closed higher by 145.27 points to 13,236.13. The tech-heavy Nasdaq gained 31.5 points to settle at 2,552.8. S&P 500 gained 16.95 points to end at 1,464.07.

Twenty-eight of the 30 Dow stocks closed in green today. Alcoa, Caterpillar, Boeing and Du Pont were the main Dow winners. JP Morgan and CoCo Cola were the only two Dow laggards.

Reports that Rio Tinto has raised a record-breaking $40 billion to fund its proposed takeover of Alcan and Dubai World is reportedly investing $5 billion to buy a 9.5% stake in MGM Mirage were the prominent deal news that boosted investor confidence that all is not so bad in the US market.

All Indian ADRs end in green

Indices were in green for the entire day. Among other deal news, TD Ameritrade and E*Trade Financial reported that they might merge. Nymex Holdings confirmed it is in takeover talks. Nymex shares rose more than 6%.

Four big banks - Citigroup, JPMorgan Chase, Wachovia and Bank of America - said today they had borrowed $500 million each from the Federal Reserve's discount window. The discount window is how Wall Street describes the process of borrowing money from the Fed at its discount rate.

All Indian ADRs ended in green today. Satyam, Rediff, Infy, ICICI Bank and HDFC Bank were the top winners. Both Satyam and Rediff gained almost 4.5% today. The other three rose up by 2.5% -3.5%.

Crude stays below $70 as inventories rise

Crude oil futures fell to the lowest level in two months an eight-week low after Energy Department’s weekly report showed an unexpected increase in inventories. Prices were also lower because Hurricane Dean weakened and is expected to dissipate by tomorrow morning.

Crude-oil futures for light sweet crude for October delivery closed at $69.32/barrel (lower by $0.16/barrel or 0.23%) on the New York Mercantile Exchange. On a yearly basis, prices are 4.6% lower. Futures fell as low as $68.63 during intraday trading.

Volume on the New York Stock Exchange neared 1.5 billion shares, with advancers beating decliners 4 to 1. At the Nasdaq, more than 1.8 billion shares were exchanged, and advancing stocks outpaced decliners by a more than 2-to-1 ratio.

For tomorrow, only a handful of notable companies are expected to report their results. On the economic front, Initial Claims will hit the wires at 8:30 ET.