WaMu up on talk of Goldman, Berkshire stake; Take-Two holders bail; Google downloads DoubleClick

By Aaron Hochman-Zimmerman

New York, March 11 - Stocks went screaming upward Tuesday, taking back the losses of the past few sessions.

Meanwhile on the deal lot, whispers ran quickly about a cash injection for Washington Mutual Inc. courtesy of Berkshire-Hathaway Holdings Inc. and Goldman Sachs Group Inc.

Google Inc. was given the go-ahead by the European Union to close with DoubleClick, even as a more conspicuous deal between Microsoft Corp. and Yahoo! Inc. sat in limbo.

Two of the major shareholders of Take-Two Interactive Software Inc. took their leave of the video gamers, which caused some to think there would be no better offers from Electronic Arts Inc. put on the table.

Bank of America Corp. continued to stand by Countrywide Financial Corp. even as more information crept up about the federal investigation into Countrywide's reporting practices.

Nymex Holdings Inc. heard from an uneasy shareholder who threatened to sue if management allows the exchange to go too cheaply to the CME Group Inc.

The airline merger between Delta Air Lines Inc. and Northwest Airlines Corp. still remained touch-and-go as the issue of pilot seniority went around the flagpole another time.

Still, Continental Airlines Inc. pilot's union was seemingly preparing for a merger as its pilots voted to add to their merger fund.

Thomas H. Lee Partners left a hearing of the House subcommittee on telecommunications with smiles on their faces about their bid for Clear Channel Communications Inc.

On the other hand, General Electric Co. reasserted it has no intention of selling NBC Universal.

The Dow Jones Industrial Average launched up by 416.66, or 3.55%, to end back above 12,000 at 12,156.81, while the Nasdaq Composite Index added 86.42, or 3.98%, to finish at 2,255.76.

The S&P 500 gained 47.28, or 3.71%, to close at 1,320.65.

"Everybody seemed to be pretty happy today," a market source said.

WaMu takes a shot of cash?

Holders of Washington Mutual (NYSE: WM) were happy as the share prices jumped $1.84, or 18.33%, to $11.88 on rumors that it took a $3 billion injection from Goldman Sachs and Berkshire-Hathaway, a market source said.

Goldman stock added $7.49, or 4.81%, to $163.07.

Berkshire-Hathaway A shares were better by just $540.00, or 0.41%, to close the day at $131,940.00.

Another market source came short of acknowledging the rumors were true, but did take notice of Washington Mutual's leap up in price.

Countrywide deal stands

Also in the troubled world of finance, shares of Countrywide Financial (NYSE: CFC) added on $0.75, or 17.20%, to close the session at $5.11 as Bank of America (NYSE: BAC) and its $4 billion deal were undeterred by the news of a federal investigation into Countrywide's reporting practices.

The Federal Bureau of Investigations will determine if Countrywide actively misled the Securities and Exchange Commission with questionable information about its clients.

Bank of America stock picked up $2.41, or 6.83%, to finish at $37.72.

Shareholder to sue if Nymex sells cheap

On the exchange side, shares of the New York Mercantile Exchange (NYSE: NMX) were better by $4.79, or 5.17%, to end at $97.36 while shares of its prospective buyer CME Group (NYSE: CME) were up $43.25, or 9.38%, to $504.50.

Shareholder Cataldo Capozza threatened a lawsuit if Nymex accepts the current $11 billion or $106 per share offer, according to a market source.

The source said Capozza believes $150 per share is a proper value for the exchange.

The already delayed talks between the two exchanges are scheduled to conclude on Saturday.

Take-Two holders take off

In technology, as major shareholders OppenheimerFunds and Fidelity severely scaled down their stakes in Take-Two (Nasdaq: TTWO), the company's shares slipped $0.20, or 0.80%, to $24.65.

The video game developer is facing a lawsuit from shareholder Patrick Solomon in Delaware chancery court which accuses management of holding off a $26 per share offer from Electronic Arts (Nasdaq: ERTS) in order to boost its own endgame compensation packages.

Many in the market believe that Oppenheimer and Fidelity's departure indicates that no better offer is likely to be forthcoming from Electronic Arts.

Take-Two has already caught negative attention for voting a sizable pay raise for Take-Two's management firm, ZelnickMedia, timed between the two bids from Electronic Arts, Prospect News reported earlier.

Electronic Arts shares added $2.44, or 5.46%, to close at $47.12.

"From what I heard he hasn't changed his story," a market source said about Strauss Zelnick.

Zelnick still claims the Electronic Arts offer significantly undervalues Take-Two, the source said.

Electronic Arts' position is that Take-Two is a depreciating asset, the source said, although Take-Two considers Electronic Arts' statement a hollow attempt to sway Take-Two to take the offer.

Google gets approval

Meanwhile, shares of Google (Nasdaq: GOOG) were better by $26.22, or 6.34%, to $439.84 as European Union regulators approved its merger with online advertiser DoubleClick.

"Advertisers and publishers who work with us have long asked that we complement our search and content-based text advertising with display advertising capabilities. DoubleClick gives Google the leading platform for display advertising, enabling us to rapidly bring advances to the market in technology and infrastructure that will dramatically improve the effectiveness, measurability and performance of digital media for publishers, advertisers and agencies," chairman and chief executive officer of Google, Eric Schmidt said in the release.

The release also warned employees to expect some layoffs as the companies combine.

"We don't think so," a market source said about the chance that the deal will significantly tip the balance in the battle between Microsoft and Yahoo!

Airline merger 'inevitable,' says Northwest CEO

Northwest Airline (NYSE: NWA) stock managed to lose $0.10, or 0.81% to end at $12.23 and Delta Air Lines stock (NYSE: DAL) stock was better by $0.13, or 1.09%, to finish at $12.11 as Northwest's chief executive officer Doug Steenland said that the record oil prices will make a merger "inevitable," a market source said.

"Oil could go up to $200 per barrel," another market source said, "they still have to deal with the blending of the pilot seniority lists ... and those pilots can be an ornery bunch."

But, he said, "I think it's wise of them not to move forward" without approval from the pilots.

Elsewhere, the pilots of Continental Airlines (NYSE: CAL) approved an assessment in order to add money to their merger fund, the market source said.

Shares of Continental tacked on $0.87, or 4.00%, to close the day at $22.62.

Also, foreign-traded Air France-KLM plans a bid for the Italian state-run airline, Alitalia.

Lee feeling good after House hearing

In the highly regulated communications industry, Clear Channel (NYSE: CCU) stock was up by $2.14, or 6.30%, to finish the day at $36.10 as prospective buyer Thomas H. Lee Partners' managing director Richard Bressler showed confidence in the deal.

After Tuesday's hearing by the subcommittee on telecommunications in the House of Representatives, Bressler said the deal with Clear Channel will be completed, according to a market source.

NBC not for sale

But one media outlet is not for sale; shares of General Electric (NYSE: GE) picked up $1.70, or 5.36%, to close at $33.40 as chairman Jeffrey Immelt did his best to insist that its NBC Universal is not, in fact, for sale despite a rising din of whispers to the contrary.

The rumors held that the timing of the possible sale was centered around the Olympics in August.

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