Financial stocks rallied again Wednesday after it looked more certain President Bush would not veto the House's expected passage of the housing bill, pushing mortgage related stocks like
The bill would throw a lifeline to government-sponsored mortgage giants
, both of which saw their stocks plummet in recent weeks amid investor concerns about their solvency. Fannie Mae jumped 11.9% to $15, while Freddie Mac rose 11.3% to $10.80.
Radian, a mortgage insurer, stands to benefit from the support the bill will provide the housing market, skyrocketed 47.6% to $1.86. Fellow mortgage insurer
shot up 19.6% to $3.23.
Another big winner for the day was
Philadelphia Consolidated Holdings
after it agreed to be acquired by Tokio Marine Holdings. The property and casualty insurer soared 64.4% to $58.43. Japanese insurer Tokio will pay $61.59 a share as it attempts to expand into the U.S. market.
American International Group
traded in the green after a Bank of America analyst upgraded the stock to buy from neutral and raised the target price. The stock climbed 7% to $30.10. The analyst sees the market gaining confidence in the company.
The Wall Street Journal
is trying to sell its money management unit, Allegiant Funds. The beleaguered bank has been the subject of many buyout rumors, although none so far have turned out to be true. The Cleveland-based bank has already raised $7 billion in capital and has been working with regulators to stabilize its situation. Shares of the bank were advancing 7.8% to $4.71.
Financial stocks stayed in positive territory throughout the day with the
NYSE Financial Sector
index rising 146.08 to 6,749.74.
Not all the financials were having such a good day.
share tumbled 20.10% to $4.65 after reporting a second quarter loss of $3.3 billion after Tuesday's bell. WaMu has been hit hard by the residential downturn and increased its provision for loan losses to nearly $6 billion for the second quarter.
shares plummeted 15.8% to $3.41 as it also reported a larger than expected loss for the second quarter. The electronic brokerage also warned of more trouble unless the economy recovers. E*Trade has suffered from losses in its mortgage business and took a $319 million provision for loan losses.