NEW YORK (
American Capital Agency Corp.
(AGNC - Get Report)
was the winner among major U.S. financial names on Tuesday, with shares rising 6% to close at $23.08.
The broad indices ended mixed, although there was some support from a 9% gain for
Goodyear Tire and Rubber
, which closed at $18.56 following better-than-expected second-quarter earnings results.
KBW Bank Index
was up slightly to close at 65.44, with all but eight of the 24 index components showing gains for the session.
(JPM - Get Report)
were down less than 1% to close at $55.33, after the company's energy trading subsidiary agreed to pay $410 million in fines and "disgorgement to ratepayers," to
settle market manipulation charges
from the Federal Energy Regulatory Commission.
The Federal Open Market Committee began its two-day meeting on Tuesday, which will be followed on Wednesday afternoon with the release of its statement on monetary policy.
has been making monthly purchases of $85 billion in long-term securities since September, in an effort to spur economic growth by holding long-term interest rates down. Investors have pushed the yield on 10-year U.S. Treasury bonds up to 2.61% from 1.70% at the end of April.
Recent comments from Fed Chairman Ben Bernanke have led some investors to expect the central bank's bond-buying to be
curtailed as early as September
, and the FOMC may issue an update to its principals for quantitative easing the committee laid out two years ago.
The rise in the market yield for the 10-year bond has done little over the short-term to expand banks' net interest margins, but it has had a big effect on market values for mortgage backed securities, which fueled the 31% decline in shares of American Capital Agency Corp. (AGNC) from the end April through Monday's market close.
AGNC late on Monday reported a second-quarter comprehensive loss of $936 million, or $2.37 a share, and a net book value of $25.51 per common share as of June 30. "Economic return" for the second quarter was a negative 8.2% when factoring in the dividends paid on common shares and the book-value decline, which the company said represented an annualized return of negative 32.9%.