NEW YORK - Wall Street shares surged Monday as Visa Inc., the world's largest electronic payment processor, said it was planning an initial public offering (IPO) aimed at raising a hefty 18.8 billion dollars.
Visa's share offering could be the largest in Wall Street history if it succeeds, and would more than overshadow the 10-billion-dollar IPO of AT & T Wireless in 2000.
The leading blue-chip Dow Jones Industrial Average finished up a strong 189.20 points (1.53 percent) at 12,570.22 after the close of trade.
The tech-rich Nasdaq ended up 24.13 points (1.05 percent) at 2,327.48 while the broad-market Standard & Poor's 500 index advanced 18.69 points (1.38 percent) to 1,371.80.
Traders said Visa's announcement helped boost market sentiment, but said investors remain wary of fears that the economy could slide into a recession.
Visa, which processes payments for credit and debit cards, said it plans to sell at least 406 million shares to public investors as soon as possible. It expects its shares to be priced at between 37 and 42 dollars per share.
The San Francisco-based company has hired a group of major investment banks to oversee its IPO, including Goldman Sachs, JP Morgan and HSBC Securities (USA) Inc.
In other news, Getty Images, a global distributor of digital media, said it had agreed to be acquired by affiliates of the Hellman & Friedman LLC private equity firm for 2.4 billion dollars.
Getty shareholders stand to receive 34 dollars in cash for each share they own in the digital-content provider if the buyout deal is approved by Getty shareholders and regulators.
Getty's shares rocketed 30 percent to close at 31.67 dollars.
Investors also continued to keep an eye on the bond insurance industry after the Standard and Poor's rating agency said it was maintaining its top "AAA" financial strength rating on Ambac.
Bond insurers have faced financial pressure from the US housing slump which has triggered losses on mortgage investments and securities underwritten by the insurers.
Ambac could have faced financing pressure if S&P had downgraded its rating. Its shares closed up 16 percent at 12.41 dollars.
On the economic front, an industry survey showed that US home sales continued to decline in January, although not as sharply as most economists had feared.
The National Association of Realtors said January US existing-home sales dropped 0.4 percent from December to an annualized sales pace of 4.89 million units, against market forecasts that sales would drop to 4.80 million.
The 4.89-million-unit rate is the lowest the Realtors' group has reported in its monthly snapshot since it began compiling the report in 1999, underlining that the troubled US housing market remains mired in a downturn.
"Lets face it, housing is still a basket case. It could be another year or more before a normal market appears. But sales are so low that a bottom seems to be in sight," said Joel Naroff, the president of Naroff Economic Advisors.
Homebuilder stocks gained as KB Home's shares ended up 2.6 percent at 24.99 dollars while DR Horton's stock finished 1.8 percent higher at 15.50 dollars.
Economists say the two-year-old US housing slump has contributed to an abrupt slowdown in wider economic growth which has also been hobbled by a credit crunch and rocketing crude oil prices.
Bond prices weakened as share prices rose. The yield on the 10-year US Treasury bond climbed to 3.902 percent from 3.790 percent late Friday while that on the 30-year bond increased to 4.664 percent from 4.581 percent.
Bond yields and prices move in opposite directions.
Europe shares gained as London's FTSE 100 index closed up 1.89 percent at 5,999.50 points. In Paris, the CAC 40 index rose 1.96 percent to 4,919.26 points and in Frankfurt the Dax added 1.12 percent to 6,882.56 points.
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02/25/2008 22:06 GMT