( AIG and other closing stock prices reflected in this update.)
AIG's two-day rally came as 91.5% of AIG stock available for shorting has been borrowed, while the rate to borrow shares jumped from the mid-teens to 40%, according to CNBC. On Tuesday, the short interest on AIG's stock hit a 52-week high with 30.33 million shares sold short out of a total 135 million shares, a CNBC commentator added.
On Tuesday, rumors circulated that U.S. regulators were considering a ban on short selling any stock with government interest. "There is no truth to the rumor that we are considering restricting the short selling of stocks in which the government has a stake," Securities and Exchange Commission spokesman John Nester told Reuters late Tuesday.AIG shares surged by $3.47, or 10.6%, to $36.24, bring the two-day rally to 24.5%. Government-sponsored entities Fannie Mae (FNM) and Freddie Mac (FRE), which were among the other big winners Tuesday, were 2.8% and 2.3%, respectively. Among U.S. bank stocks, Bank of America (BAC) was higher as the bank said it will eliminate overdraft fees on purchases made with debit cards. Customers, however, will be denied from making purchases if they have insufficient funds in their accounts. Bank of America's new policy begins for new customers on June 19. For existing debit-card holders the plans take effect in August. Shares of the bank rose 1.9% to $17.11. Citigroup (C) also traded higher on a Bloomberg report the bank will sell its Citi Property Investors unit to private-equity group Apollo Management. A deal would give Apollo 65 real estate investments in 26 countries with a net asset value of $3.5 billion, according to a Bloomberg report. The purchase may take as long as three months to close, a person with knowledge of the deal told Bloomberg. Meanwhile, Rochdale Securities analyst Dick Bove said during an interview with CNBC Wednesday that Citigroup's stock will likely keep climbing. ""If one was able to separate out the business that they're going to sell at the moment...the part that's going to survive has got a 65 cents to 70 cents earnings power, which I think is a $7 stock," Bove said, according to a transcript of the interview. "But you have to go through the sale of the government stock before, I think, it starts to move up even more seriously."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $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
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV