NEW YORK (
were among the winners of the financial sector Tuesday as regulators convened on Capitol Hill to discuss the future of the mortgage-finance giants.
are in focus Tuesday as Treasury Secretary Timothy Geithner appeared before the House Financial Services Committee.
In prepared remarks, Geither said that the failure of Fannie Mae and Freddie Mac was part of a "broader crisis that revealed structural flaws in the entire housing finance system." He added that the case for providing direct government support to stabilize mortgage credit "would thus rest on the judgment that mortgage credit is particularly important to households and the economy overall."
"Moreover, the relative size of the housing market and high correlation of losses it can experience in times of financial distress means that government may be best suited to serve as a source of stability in a responsible manner," Geithner added.
Fannie Mae shares were lately up 1.8% to $1.11, and Freddie Mac was rising 2.3% to $1.32.
In other Freddie Mac news, shares of
The PMI Group
rallied 13.4% to $3.56 after Freddie Mac approved the mortgage-insurance company as an Eligible Mortgage Insurer.
Among other mortgage insurers,
gained 4% to $12.05,
rose 2.2% to $8.97, and
added 1.9% to 26 cents.
Turning to U.S. bank stocks,
rose 1% to $44.17 following a research note from Rochdale Securities analyst Dick Bove that said the bank should rid itself of its consumer finance businesses.
Bove says that Congress does not want big banks in this country, and that "this is a battle JP Morgan cannot win."
To back his recommendation that JPMorgan should dump its consumer finance businesses, Bove reasons that there will b e near-term forced changes in structure, intermediate term losses and long-term lack of appealing secular growth.
Bove did add that "If one can only own one bank stock this is the one they should own because this bank is the one most likely to deliver on its promises."
Among other U.S. bank stocks,
rose 1.2% to $4.09 and
tacked on 0.5% to $30.56.
Bank of America
was flat at $16.96.
On the downside,
fell 0.9% to $174.63, and
dipped 0.5% to $29.45.
-- Written by Robert Holmes in Boston
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