NEW YORK

Optimism helps stock market gain ground

NEW YORK — Stocks rebounded sharply Wednesday as investors, growing optimistic about chances for an interest rate cut, sought bargains after the previous session's huge tumble. The Dow Jones industrials gained almost 250 points.

Many investors believe that the Federal Reserve will cut rates at its next meeting Sept. 18 or even sooner and were preparing for Fed Chairman Ben Bernanke to hint at such a move Friday at a speech in Jackson Hole, Wyo. The possibility of a cut has given Wall Street some hope that the stock market will recover from its summer volatility and that right now, it's a good strategy to buy while the buying is cheap.

Although it has not yet indicated that it will lower its benchmark funds rate, the Fed has been adding cash to the banking system in an attempt to keep credit markets liquid. The Federal Reserve Bank of New York said Wednesday that it would inject $5.25 billion through a one-day repurchase agreement, where it buys that amount in collateral from dealers who then deposit the money into commercial banks.

The Dow rose 247.44, or 1.90 percent, to 13,289.29, near its highs of the session. The blue chip index tumbled 280 points Tuesday amid pessimism about the Fed's intentions.

Broader stock indicators also jumped. The Standard & Poor's 500 index added 31.40, or 2.19 percent, to 1,463.76, while the Nasdaq composite index gained 62.52, or 2.50 percent, to 2,563.16.

Bonds fell back as investors moved back into stocks. The yield on the benchmark 10-year Treasury note rose to 4.57 percent from 4.52 percent late Tuesday.

Ginnie Mae to lift loan cap for veterans

NEW YORK — Ginnie Mae, the Government National Mortgage Association, is eliminating the cap on certain government-backed mortgages it accepts, in a bid to boost low-cost financing for veterans seeking to buy in pricey areas.

Starting Saturday, the agency will accept as collateral for its mortgage bonds "jumbo" loans of more than $417,000 — the current limit — insured by the Department of Veterans Affairs. So-called VA loans account for about one-third of the mortgage-backed securities issued by Ginnie Mae, which packages securities backed by government-insured loans.

"We expect this change will expand the availability of low-cost financing and increase homeownership opportunities for America's veterans, particularly in high-cost areas, by encouraging lenders to make more VA loans," said Michael J. Frenz, executive vice president of Ginnie Mae.

ARKANSAS

Alltel shareholders OK $24.7 billion buyout

NORTH LITTLE ROCK — Alltel Corp. shareholders overwhelmingly approved a $24.7 billion buyout Wednesday that put the wireless company in the hands of two private investor groups. Chief Executive Scott Ford presided over the two-minute meeting, which he described as "our final shareholders meeting."

A tally counted 97.1 percent of the shares in favor of the takeover, Ford said, to mild cheers. Alltel has been the subject of takeover rumors for years. The company announced in February that it was undertaking a "strategic review," signaling that the fifth-largest U.S. wireless company was in play.

The buyout must still be approved by the Federal Communications Commission. The sale should close by the end of the year, Alltel spokesman Andrew Moreau said.

Alltel, with 12 million customers in 35 states, agreed in May to a proposed $71.50-a-share buyout by Fort Worth, Texas-based TPG Capital, and New York-based GS Capital Partners, a subsidiary of Goldman Sachs.

PENNSYLVANIA

Calyon claims $1.2 billion in mortgages

PHILADELPHIA — Acting on behalf of a syndicate of investors, a unit of Credit Agricole has laid claim to nearly $1.2 billion worth of mortgages caught up in the bankruptcy of American Home Mortgage Co.

Filed Tuesday in the Delaware court where American Home filed for Chapter 11 protection Aug. 6, the lawsuit by Credit Agricole's Calyon is the largest of a series of actions that former backers have filed in the failed lender's bankruptcy case. Banks say they own the loans and want the files and cash that are in the hands of American Home, which has been servicing them.

American Home, based in Melville, N.Y., sought court protection to control the process by which its complex business is being dismantled.

MISSOURI

Wachovia seeks to buy A.G. Edwards

ST. LOUIS — A.G. Edwards & Sons Inc. shareholders will vote next month on whether to approve a purchase offer from Wachovia, the nation's fourth-largest bank.

A.G. Edwards announced Wednesday that the special stockholder meeting will be at the brokerage firm's headquarters Sept. 28. Charlotte, N.C.-based Wachovia proposed the deal in May, offering to buy A.G. Edwards for $6.8 billion in cash and stock.

IRELAND

Coke will shut plant, cut 166 jobs

DUBLIN — Global soft drinks giant Coca-Cola Inc. announced plans Wednesday to shut down one of its three plants in Ireland and trim 166 jobs.

The Atlanta-headquartered maker of Coke and scores of other drinks said it was shifting production of concentrates from its 30-year-old plant in Drogheda, north of Dublin, to two other Irish plants to boost efficiencies and save costs.

CALIFORNIA

Gap CFO leaves to oversee Visa's books

SAN FRANCISCO — Gap Inc.'s chief financial officer is leaving the slumping clothing retailer to oversee the books at Visa Inc. as the nation's largest credit card network prepares to go public.

Byron's Pollitt's defection, announced Wednesday, isn't a surprise because Gap is ushering in a new regime after last month's hiring of Glenn Murphy as chief executive officer.