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Microsoft Bid for Yahoo Lifts Stocks

Investors were also cheered by hopeful news for bond insurers, though a surprising decline in January payrolls dampened the mood somewhat

Stocks finished higher Friday after a surprise $44.6 billion bid by Microsoft (MSFT) for Yahoo (YHOO) and some encouraging news for beleaguered bond insurers offset a report showing that payrolls shrank by 17,000 in January – a decline that renewed recession fears on Wall Street.

The tech deal news and labor-market downturn overshadowed what on any other day would have been top market headlines: Disappointing profits at Google (GOOG), Alcoa’s (AA) deal with a Chinese metals company to buy a stake in Rio Tinto (RTP), record profits for Exxon Mobil (XOM), and word that Motorola (MOT) may be mulling a split-up of the company. Finally, the Federal Reserve announced a plan to inject $60 billion into the banking system through two auctions in February.