NEW YORK (TheStreet) -- Financial shares were mixed Friday afternoon as investors processed the Federal Reserve's surprise announcement late Thursday that it would lift the interest rate it charges banks to take short-term loans through its emergency discount window.
By far the biggest financial-stock gainers during the session came from the discount-brokerage sector, after
analyst on the beat, Richard Ramsden,
His rationale? Less downside risk to these stocks in the wake of the Fed's discount-window move; among other things, low interest rates have forced cut-rate brokerages to waive fees on money-market funds, cutting into profits.
were up 5.2% to $18.74, while
stock was gaining 2.7% to $18.06.
Many market watchers took the Fed's decision, which came earlier than expected, as an indication that economic recovery was proceeding apace, and that the "normalization" process had begun -- "normalization" being the de rigueur catchphrase to describe the Fed's gradual unwinding of its crisis-era programs. For instance, central bankers evidently no longer believe that huge, troubled banks require emergency borrowings.
Still, the move was also widely understood as symbolic. Fed Chairman Ben Bernanke and other Fed top-siders took great pains to note that the federal funds rate would remain historically low for the good old "foreseeable future."
Megabank shares were mostly in the red, though barely so, with
losing 0.3% to $3.42,
declining 0.9% to $40.05, and
giving up 0.7% to $27.32.
Bank of America
, meanwhile, were gaining 0.4% to $15.94. Testimony from the firm's former chieftain, Ken Lewis, was made public on Wednesday, and the deposition documents indicated that Lewis received two briefings on the big losses then socking
at the time of Bank of America's takeover of the firm.
Elsewhere, a report in
The New York Times
indicated Friday that several executives high up in the Goldman corporate tree dumped millions of dollars in their firm's stock amid the burgeoning financial implosion of 2008 -- moves that may suggest that at least
Goldman Sachs shares were trading higher Friday, gaining 0.4% to $156.37. Rival
stock price was up a similar percentage to $27.36.
-- Written by Scott Eden in New York
Follow TheStreet.com on
and become a fan on
Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.