The markets recovered during the midday to trade modestly higher with the Dow rising 36 points to 10,953 over speculation that the Fed may cut interest rates. Nasdaq added 4 points to 2184.
On the upside
Shares of Merrill Lynch (NYSE: MER) surged as investors embraced the acquisition of the investment banker by Bank of America (NYSE: BAC).
Rumors that JP Morgan Chase (NYSE: JPM) opened negotiations to purchase Washington Mutual (NYSE: WM) lifted shares of the beleagured thrift.
On the downside
Particle Drilling Technologies (Nasdaq: PDRT) announced that its latest commercial field trial failed to improve on the results of a previous trial. The company also announced intentions to explore strategic alternatives including the possible sale of the company.
An analyst downgraded Morgan Stanley (NYSE: MS) after fellow investment bank Goldman Sachs (NYSE: GS) reported a sharp 70% drop in third quarter earnings.
Consumer electronics retailer Best Buy (NYSE: BBY) disappointed with lower second quarter earnings that fell short of estimates.
In the broad market, declining issues outpaced advancers by a margin of 5 to 2 on the NYSE and by nearly 5 to 4 on Nasdaq. The Russell 2000 which tracks small cap stocks gained 5 points to 695.
