Stocks rallied in the closing minutes to end up. Dow was up 41, advancers over decliners 3-2 & NAZ was up 12 in what was a choppy day. The FED issued a report that the economy has weakened this year, pretty much what I have been talking about. At midday, the big news was Ambac (ABK), the troubled bond insurer, down 2.02, said they will raise $1½B to get over their troubled times. The AP story below talks about trying to hold back downgrades for their debt from AAA to AA (of huge importance to a bond insurer):
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Standard & Poor's and Moody's said Wednesday that Ambac's plan to raise $1.5 billion would be enough to avert a downgrade. Both said the offering represented an important part of the company's overall plan to strengthen its credit profile.
But competitor Fitch Ratings, the only major ratings agency to downgrade the New York-based bond insurer, was less optimistic. If Ambac successfully raises the capital, it would likely affirm the insurer's "AA" rating, said Thomas Abruzzo, a managing director at Fitch and head of the financial guaranty team. But Fitch said it doesn't believe it will be possible to regain a "AAA" rating until its subprime risk can be contained.
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That's not all, oil surged an eye-popping $5 to 104 from a surprise drop in crude oil reserves. In addition, the Euro rose to $1.53 (another record). Financials had a very tough day but overall, the markets digested this news very well. Let's see what tomorrow brings.
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