Story updated to include closing prices.
The Dow Jones Industrial Average was back over 11,000, as investors reacted to the Federal Reserve's open market committee's statement that short-term rates would likely remain at their historically low levels through the middle of 2013 and financial names pared losses, following Monday's market slide in the wake of S&P's downgrade of its long-term debt rating for the United States, along with additional downgrades of government-sponsored enterprises and insurers.
Citigroup (C) also saw a significant recovery, with shares rising 14% to close at $31.82, following Monday's 16% decline.Also rising 8% were Regions Financial (RF), which closed at $4.78; SunTrust (STI), closing at $19.98; U.S. Bancorp (USB), at $23.37; New York Community Bancorp (NYB), at $12.42; and Wells Fargo (WFC), which closed at $24.78, following a ratings upgrade to "Outperform" from FBR analyst Paul Miller. Large banks seeing shares rise 8% on Tuesday included Capital One (COF), which closed at $40.82, after the Wall Street Journal reported that the company was nearing a deal to purchase HSBC's (HBC) U.S. credit card portfolio. Shares of JPMorgan Chase (JPM) rose 7% to close at $36.40, recovering some of Monday's 9% decline. Large banks seeing shares rise 6% on Tuesday included Cullen/Frost Bankers (CFR), which closed at $49.99; Fifth Third Bancorp (FITB), at $10.55; KeyCorp (KEY), at $6.92; and Huntington Bancshares (HBAN), which closed at $5.23. Huntington was among three bank dividend names recommended by Oppenheimer analyst Terry McEvoy. The private mortgage insurers also saw significant recoveries, with PMI Group (PMI) up 12% to close at 3 cents, following Monday's 16% gain. The shares tanked 75% last week on word that its main private mortgage subsidiary was undercapitalized. MGIC (MTG) rose 24% to close at $2.35, recovering a bit from Monday's 41% decline. The shares dropped 20% last week. Radian (RDN) was up 29% to close at $2.56, recovering from Monday's 28% decline. The shares sank 13% last week. American International Group (AIG) -- which also operates in the private mortgage insurance space -- was up 6% to close at $23.98, following Monday's 10% decline. AIG's shares were down 13% last week.
Philip van Doorn. To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.
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