(Updated with stock price moves.)
NEW YORK (TheStreet) -- American International Group (AIG) was among the winners of the financial sector Tuesday on comments from a ratings agency that the insurer is moving towards repaying bailout funds.
AIG shares jumped Tuesday after Moody's Investor Services said the insurer will likely be able to repay the government's loan and much of its preferred equity stake.
Last week, AIG reported a third-quarter profit of $455 million, or 68 cents a share. Excluding items, AIG earned $2.85 a share, beating Wall Street's forecast of $1.98 a share. Moody's said that, if AIG continues to stabilize, it will likely generate enough value to repay the government.Moody's maintained its credit rating on the stock, affirming the long-term rating of A3 with a negative outlook. Lately, AIG was up $1.66, or 4.6%, to $37.84. In other insurer news, MBIA (MBI) shares fell sharply after the bond insurer late Monday reported a third-quarter net loss of $727.8 million, or $3.50 a share, as a result of increased unrealized losses on credit derivatives. Deutsche Bank said its own calculations puts MBIA's operating loss at $1.24 a share for the quarter, which would be worse than the Thomson Reuters average estimate of $1.05 a share. MBIA shares were tumbling 97 cents, or 20.2%, to $3.83. Ambac Financial (ABK) traded lower in sympathy, dropping 12.7% to $1.03. Turning to bank stocks, Reuters reported that JPMorgan Chase (JPM) will lift a salary freeze it put in place last year for employees making more than $60,000 a year, citing an internal bank memo.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV