Stocks Add to Rebound Gains

As investors awaited legislative aid, Wachovia (WB Quote) announced it has agreed to be sold to Wells Fargo (WFC Quote) in a $15.1 billion deal that Wells Fargo says will not require assistance from the Federal Deposit Insurance Corp. or any other government agency. The deal seems to negate another deal brokered by the FDIC Monday under which Citigroup (C Quote) agreed to acquire all of the banking subsidiaries of Wachovia. Citi is threatening legal action to stop the Wells Fargo deal and keep its own merger deal with Wachovia in place.

"Now you see a deal that's being done without being forced," said Sparks. He said that it's a positive for the market to see a bank merger based on valuation rather than the impulse on the part of the government to save a failing company.

Not all news from the financial sector was as rosy. Swiss bank UBS (UBS Quote) said it would cut 2,000 jobs as part of its reorganization efforts.

Insurance firm AIG (AIG Quote) said it would sell several of its business segments in an effort to pay back an $85 billion loan from the government.

The Wall Street Journal reported that Washington Mutual CEO Alan Fishman won't stay on at JPMorgan Chase (JPM Quote), which acquired WaMu after it failed on Sept. 25.

In other board shakeups, mortgage packager Fannie Mae (FNM Quote) announced that former CEO Daniel Mudd will not be keeping his seat on Fannie's board.

Meanwhile, several media reports suggested that Japanese firm Mitsubishi UFJ (MTU Quote) may merge its investment banking unit with Morgan Stanley (MS Quote) operations in Japan.

Elsewhere, private equity firm Blackstone (BX Quote) bought a $600 million stake in China National BlueStar, according to a report by Bloomberg.