Thursday's Financial Winners & Losers
Financial stocks were rallying Thursday, as the market liked the
Federal Reserve's
rate cut and accompanying statement better after sleeping on it a night, as well as positive earnings and M&A news from several companies.
The rate-setting Federal Open Market Committee on Wednesday
rate a quarter point to 2%, as expected. The accompanying statement, however, was vague in its hints about the central bank's next move and stocks finished the day down slightly.
On Thursday, they rallied across the board and the
NYSE
Financial Sector Index closed up 208.52 to 7,942.77.
The gains were aided by an optimistic outlook for mortgage lender
IndyMac
(IMB)
. CEO Mike Perry sent a note to employees saying he believed the company had "turned a corner" and that business was improving. The stock shot up 22.2% to $3.97. IndyMac is still expected to record a loss in the first quarter, but not as bad as the fourth quarter loss.
Radian Group
(RDN) - Get Report
shares also rallied 14.4% after announcing it had amended its revolving credit agreement. The amendment removes any minimum credit rating requirements and reduces the net worth the company must keep. Shares of Radian were up 78 cents to $6.18.
SunTrust Banks
(STI) - Get Report
climbed 5.3% to $58.70 after announcing it had completed the acquisition of GB&T Bancshares. The integration should be finished by late summer 2008 and adds roughly $1.5 billion in deposits and 17 banking offices in the Georgia market.
Wells Fargo
(WFC) - Get Report
also was buoyed by deal news. The San Francisco bank acquired Flatiron Credit for an undisclosed amount. Denver-based Flatiron issues loans to customers that need it to purchase insurance and is the seventh largest insurance premium lender. It had been a subsidiary of TD Banknorth. Well Fargo shares added 4.8% to $31.66.
Fiserv
(FISV) - Get Report
shares gained 3.5% after the financial information management services provider beat analysts' forecasts, but lowered its 2008 outlook on late Wednesday. The results follow its $4.4 billion acquisition of CheckFree in December. The stock closed up $1.77 to $52.32.
Willis Group Holdings
(WSH)
jumped 6.1% after the world's third-largest insurance broker said total revenue was up and net new business was higher in the first quarter, even though net income dropped after severance charges. The stock rose 6.1% to $36.86.
Separately, commercial finance company
CIT Group
(CIT) - Get Report
was a big winner ticking up 9.9% on little news.