Bank of America Bounces Back: Financial Winner
Story updated to include closing prices.
NEW YORK (
) -- Shares of
Bank of America
(BAC) - Get Report
rose 17% Tuesday to close at $7.60 as bank stocks pared the preceding week's losses.
The
Dow Jones Industrial Average was back over 11,000
, as investors reacted to the Federal Reserve's open market committee's statement that
short-term rates would likely remain at their historically low levels through the middle of 2013
and financial names pared losses, following Monday's market slide in the wake of
S&P's downgrade of its long-term debt rating for the United States
, along with
additional downgrades of government-sponsored enterprises
and
.
|
The
KBW Bank Index
(I:BKX)
rose 7% to close at 39.58, with all 24 index components rising for the session.
Citigroup
(C) - Get Report
also saw a significant recovery, with shares rising 14% to close at $31.82, following Monday's 16% decline.
Also rising 8% were
Regions Financial
(RF) - Get Report
, which closed at $4.78;
SunTrust
(STI) - Get Report
, closing at $19.98;
U.S. Bancorp
(USB) - Get Report
, at $23.37;
New York Community Bancorp
( NYB), at $12.42; and
Wells Fargo
(WFC) - Get Report
, which closed at $24.78, following a
ratings upgrade to "Outperform" from FBR analyst Paul Miller
.
Large banks seeing shares rise 8% on Tuesday included
Capital One
(COF) - Get Report
, which closed at $40.82, after the Wall Street Journal reported that the company was nearing a deal to purchase
HSBC's
(HBC)
U.S. credit card portfolio.
Shares of
JPMorgan Chase
(JPM) - Get Report
rose 7% to close at $36.40, recovering some of Monday's 9% decline.
Large banks seeing shares rise 6% on Tuesday included
Cullen/Frost Bankers
(CFR) - Get Report
, which closed at $49.99;
Fifth Third Bancorp
(FITB) - Get Report
, at $10.55;
KeyCorp
(KEY) - Get Report
, at $6.92; and
Huntington Bancshares
(HBAN) - Get Report
, which closed at $5.23.
Huntington was among
three bank dividend names recommended by Oppenheimer analyst Terry McEvoy
.
The private mortgage insurers also saw significant recoveries, with
PMI Group
( PMI) up 12% to close at 3 cents, following Monday's 16% gain. The shares tanked 75% last week on word that its main private mortgage subsidiary was undercapitalized.
MGIC
(MTG) - Get Report
rose 24% to close at $2.35, recovering a bit from Monday's 41% decline. The shares dropped 20% last week.
Radian
(RDN) - Get Report
was up 29% to close at $2.56, recovering from Monday's 28% decline. The shares sank 13% last week.
American International Group
(AIG) - Get Report
-- which also operates in the private mortgage insurance space -- was up 6% to close at $23.98, following Monday's 10% decline. AIG's shares were down 13% last week.
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U.S. Downgrade Doesn't Hit Bank Capital Requirements >
S&P Downgrades U.S. Debt Rating to AA+ >
A Chill Pill for Long Term Stock Investors >
--
Written by Philip van Doorn in Jupiter, Fla.
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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
