The week ended with a bang as the Dow Jones Industrial Average soared 197.85 points to close at 11,628.05 on Friday. The bullish run was driven partly by a $6.59 drop in the price of crude oil to $114.59 per barrel as well as a jump in financials on a report that Lehman Brothers Holdings Inc. may be an acquisition target of Korea Development Bank (KDB).
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Lehman climbed 5.03% to close at $14.41 per share due to a Reuters report that KDB considered Lehman "one of its options for acquisitions." This sparked a rally among other financials. Some big gainers included J.P. Morgan Chase & Co., which climbed 3.89% to $37.67; Morgan Stanley, with a 4.94% increase to $38.89; and Merrill Lynch & Co. Inc., which jumped 3.62% to $25.22.
In other financial news, the Securities and Exchange Commission said Friday that investors who purchased risky auction-rate securities from Merrill Lynch before the market for those bonds collapsed will be able to recover up to $7 billion under a new settlement agreement.
A bright spot among deal stocks Friday was Alpharma Inc., which skyrocketed 43.55% to close at $34.51 on news that rival King Pharmaceuticals Inc. went public Friday, Aug. 22, with an offer to buy it for $33 per share, or $1.4 billion, in cash after the target rejected its first bid earlier this month. - Michael Rudnick
