Opening Bell Report

The markets opened higher on news that private equity firms were injecting capital into the financial services sector. The Dow rose 41 points to 12,651 while Nasdaq added 7 points to 2378.

On the upside

Private equity firm TPG and other investors are planning to invest $5 billion into Washington Mutual (NYSE: WM), according to a Reuters report. Citigroup (NYSE: C) and Wachovia (NYSE: WB) joined the rally.

Investors continued to snap up shares of coal producers with Alpha Natural Resources (NYSE: ANR) and Consol Energy (NYSE: CNX) leading the way.

Shares of KLA-Tencor (Nasdaq: KLAC) rose after an analyst upgraded the maker of semiconductor testing equipment.

On the downside

Yahoo (Nasdaq: YHOO) insisted on an improved offer in response to a letter from Microsoft (Nasdaq: MSFT) which threatened to turn its bid for the Internet portal into a proxy fight.

JPMorgan downgraded Aruba Networks (Nasdaq: ARUN) which makes products for wireless computer networks due to the weak economy.

Shares of MGM Mirage (NYSE: MGM) fell after an analyst downgraded the hotel and casino operator due to an uncertain convention business environment in Las Vegas.

In the broad market, advancing issues outpaced decliners by a margin of more than 2 to 1 on the NYSE and by 5 to 4 on Nasdaq. The Russell 2000 which tracks small cap stocks added 3 points to 717.

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