Stocks point mostly higher as BofA raises capital

[May 20, 2009]  NEW YORK (AP) -- Stocks signaled a mostly higher open Wednesday as investors found relief over Bank of America Corp.'s ability to raise capital.

The bank said late Tuesday that in less than two weeks it had raised $13.47 billion through the sale of 1.25 billion shares. That helped put the company more than halfway toward raising the money the government said was necessary based on a review of the bank's books.

Bank of America's ability to raise cash is a welcome sign for traders still worried about how it will fare if consumers to fall behind on more debt from mortgages to credit cards.

The government found in its recent "stress tests" on the nation's 19 largest financial companies that Bank of America would need $33.9 billion to protect against losses if the economy worsened. That was more than any other bank reviewed. The company already raised $7.3 billion from the sale of a business in Asia since the government issued its report cards for banks on May 7.

The stability of banks and an increase in lending that could result are seen as crucial to a sustained recovery in the economy. Bank of America shares rose 2.7 percent in electronic trading.

Beyond banks, investors are awaiting testimony from Treasury Secretary Geithner before a Senate committee over the White House's plan to steady the banking system. He is expected to appear at 9:30 a.m. Eastern.

Stocks were mostly called higher ahead of the testimony. Dow Jones industrial average futures rose 12, or 0.1 percent, to 8,461. Standard & Poor's 500 index futures rose 2.10, or 0.2 percent, to 908.60, while Nasdaq 100 index futures slipped 0.75, or less than 0.1 percent, to 1,393.25.

Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, slipped to 3.24 percent from 3.25 percent late Tuesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.18 percent from 0.17 percent.

The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude rose 25 cents to $60.35 per barrel in electronic trading on the New York Mercantile Exchange.

Overseas, Japan's Nikkei stock average rose 0.6 percent. In afternoon trading, Britain's FTSE 100 fell 0.4 percent, Germany's DAX index rose 0.4 percent, and France's CAC-40 fell 0.2 percent.

[Associated Press; By TIM PARADIS]

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