AIG: Financial Winners and Losers
NEW YORK (
) -- Most financial stocks were little changed Wednesday on light to average volumes as investors spent much of the day waiting for the
Federal Reserve
's Open Markets Committee to announce the results of its latest meeting.
As expected, the Fed announced it would buy back U.S. Treasury bonds in a bid to stimulate the economy and reduce unemployment. The Fed hopes its buying program -- which it said would total $600 billion through June -- will encourage borrowing and spending in much the same away a reduction in its overnight lending rate does, though many economists are concerned such a move might lead to runaway inflation or fuel asset bubbles.
Following the Fed's announcement, volumes on the
Financial Select Sector SPDR
(XLF) - Get Report
, an exchange-traded fund that tracks financial stocks, ticked up sharply.The ETF, which had been trading in a tight range, hit a new high for the day and then a new low. Even so, the price stayed within 1.5% of Tuesday's $14.61 close, and finished up 1.4% at $14.80.
Big financial stocks like
Wells Fargo
(JPM) - Get Report
,
Citigroup
(C) - Get Report
and
Bank of America
(BAC) - Get Report
followed a similar pattern: trading in a tight range and preparing to close in positive territory. The leaders among the largest banks Wednesday were
JPMorgan Chase
(JPM) - Get Report
, and Wells, both of which gained 2.08% on the day.
Investment banking giants
Goldman Sachs
(GS) - Get Report
and
Morgan Stanley
(MS) - Get Report
saw a slight reversal of recent trends, with Morgan Stanley jumping 3.37% to $25.44 on average volumes and Goldman falling 0.17% to $162.55 on light volumes.
One financial stock that saw some early action was
AIG
(AIG) - Get Report
, which closed up 3.35% to $43.53 on roughly double the average volume. CreditSights analyst Rob Haines who recently wrote a report arguing the stock was worth $36.35 in a best case scenario, saw little obvious explanation for Wednesday's action, though he speculated the election results might be a factor.
Regardless,
AIG looks to be gaining respectability among equity investors
. Further, as increasing attention is paid to the fact that companies with big losses in recent years like
General Motors
(GM) - Get Report
and Citigroup
, it is possible investors are waking up to the fact that AIG will enjoy similar benefits.
--
Written by Dan Freed in New York
.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
