Winners & Losers
Friday's Financial Winners & Losers
Sarina Penn
08/31/07 - 04:42 PM EDT
Updated from 1:50 p.m. EDT
Relatively sparse trading -- buoyed by comments from Federal Reserve Chairman Ben Bernanke and President Bush as well as some company-specific good news -- pulled the financial sector higher along with the broader market on a choppy Friday ahead of an extended holiday weekend.
Bernanke, while failing to indicate an upcoming interest rate cut in his speech, also said the Fed will "act as needed" to assist the economy. Bush, meanwhile, urged mortgage holders to use Federal Housing Administration insurance while emphasizing that the government has a limited role in bailing out troubled borrowers.
The NYSE Financial Sector Index climbed 141.58 points, or 1.6%, to around 9,011.57 as the KBW Bank Index added 1.3% to 106.03.
Mortgage lenders took particular benefit from Bernanke's and Bush's comments today, among them Fremont General (FMT Quote) and NovaStar Financial (NFI Quote), which jumped 8.7% and 3.8%, respectively. IndyMac (IMB Quote) and Countrywide (CFC Quote) gained 4.5% and 1.1%, respectively. Thornburg Mortgage (TMA Quote), which was climbing earlier in the day, closed down 0.3% to $11.78.
Among the biggest financial-sector winners, however, was subprime-mortgage lender Accredited Home Lenders (LEND Quote), shares of which rocketed 43.4% after Lone Star revised its bid for the company to $8.50 a share.
The private-equity firm had agreed to pay $15.10 a share in June before Accredited was burned by the subprime market's total collapse, after which Lone Star indicated that it didn't expect to close the deal. That led to a legal impasse that, Lone Star said in a letter to the San Diego-based firm, "ultimately benefits neither Lone Star nor [Accredited's] stockholders."
The revised offer would also "waive all breaches that occurred prior to the amendment," Lone Star said. Accredited stock shot up $2.74 to close at $9.05.