Updated in the second paragraph with First Niagara's announcement after the market close of a major repositioning of the company's balance sheet.
The Buffalo, N.Y., lender after the market close announced that it had "taken steps to reposition its securities portfolio through the sale of $3.1 billion of mortgage-backed securities (MBS), the proceeds of which were used to repay a comparable amount of short-term debt." First Niagara also said that there were no prepayment penalties on the debt repayments, and that the company would "recognize a $16 million pre-tax gain from the sale of securities in the second quarter of 2012."
First Niagara CFO Gregory Norwood said "the selection and sale of securities with the greatest levels of prepayment risk coupled with the deleveraging have better positioned us to benefit when interest rates ultimately rise. At the same time, we have also significantly reduced the near-term earnings volatility created by the current sustained low interest rate environment."The broad indexes saw gains of nearly 1% after the U.S. Commerce Department reported that new orders for durable manufactured goods increased by $2.3 billion, or 1.1%, to $217.2 billion during May, following two consecutive months of declines. Economists had been expecting a 1% increase during May, according to Briefing.com. Following a plea from Spain's prime minister Mariano Rajoy for European leaders to agree at their summit beginning Thursday to "urgent" measures to help prop up weaker eurozone member nations, since "we can't finance ourselves at the prices we are paying for very long," German Chancellor Angela Merkel called quick remedies for Europe's debt crisis "eyewash," and fake solutions," according to a Financial Times report. Merkel continues to insist upon more centralized European authority over bailed-out member nations' budgeting and borrowing, and that "eurobonds, or
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