A disastrous week on Wall Street finished with a nice lift as the
Dow Jones Industrial Average jumped 494.13 points to close at 8,046.42
on Friday, somewhat salvaging the nearly 950 points lost for the first four
days of the week. The Street appeared to have been positive about new
blood in the Treasury Department as reports surfaced Friday that New
York Federal Reserve President Timothy Geithner may take over for Henry
Paulson once President-elect Barack Obama takes residence at 1600
Pennsylvania Ave.
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American International Group Inc. may take comfort in Geithner's
possible appointment, having spent many a long nights at the table with
him in the structuring of its bailout. AIG shareholders had another
reason to celebrate as Japan's Nihon Keizai Shimbum reported on
Thursday that a consortium led by sovereign wealth fund China
Investment Corp. is in negotiations to acquire up to a 49% in AIG's
American Life Insurance Co. business for anywhere between $5
billion and $11 billion, which should help chip away at the Fed's $150
billion loan. AIG shares gained 11.11% to close at $1.60 on Friday.
Despite
the continued squeeze on capital markets, the auction block is not yet
barren. Share of fast-food chain Cosi Inc. climbed 5% to 42 cents per
share on news that its board formed a special committee and hired North
Point Advisors to explore strategic alternatives.
Not all was rosy
among Deal Stocks. Hedge fund Elliott Associates LP on Friday dropped
its $7.50 per share tender offer for Epicor Software Corp., saying it
was "astounded and disappointed" as the target's board continued to
recommend shareholders reject a deal. Epicor's stock plummeted 15.04%
to close at $3.05 per share. What was Epicor thinking, turning down a
fully financed deal amid these gloomy markets?
And when you talk
about gloomy markets, you can't leave out Citigroup Inc. Battered Citi
continued its skid, sinking 19.96% to close at $3.77 per share. The
bank's board reportedly met Friday amid signs that directors are
considering selling all or part of it, according to various media
reports. - Michael Rudnick
