Financial Winners & Losers for July 16

The San Francisco-based bank reports record revenue of $11.5 billion, up 16% year over year.
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Booming bank stocks propelled the financial sector Wednesday, led by Wells Fargo (WFC) - Get Report and its respectable second-quarter earnings.

The San Francisco-based bank did not beat last year's earnings, but it did report record revenue of $11.5 billion, up 16% from the previous year. It also raised its dividend by 10%.

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Wells Fargo rocketed to $26.78, a gain of $6.29, or 30%, its best day since shortly after the stock market crash of 1987. Analysts had forecast that the bank would report earnings of 50 cents per share; it delivered 53 cents per share.

The NYSE Financial Sector index soared 352.23 to 5900.90, an advance of 6.4%.

Bank of America

(BAC) - Get Report

catapulted 15.3% to $21.28, a move of $2.91. That came on a day when Fitch Ratings downgraded its issuer default rating, while upgrading the rating of Countrywide Bank. Countrywide Home Loans also agreed to pay a settlement to a Chapter 13 bankruptcy trustee over allegations that the lender sought improper fees or payments; the fee was $325,000.

Charles Schwab

(SCHW) - Get Report

reported that stronger fees and trading levels helped drive second-quarter net income to 26 cents per share, or $295 million. Investors were cheered by the broker's 1% increase of assets to $1.4 trillion and its addition of new customers. The stock zoomed 12.9% to $21.70.

Elsewhere,

Federal Reserve

Chairman Ben Bernanke told Congress on Wednesday that troubled mortgage giants

Fannie Mae

and

Freddie Mac

are in "no danger of failing." The Fed chief made his remarks to the House Financial Services Committee in his second day on Capitol Hill, where he found himself in the hot seat as he faced lawmakers' questions on the country's economic problems. Bargain-hunters began lapping up shares of Fannie, pushing the stock up 34% to $9.41; Freddie Mac climbed 34.9% to $7.10

Investment banks got in on the act.

Lehman Brothers

(LEH)

ascended 26% to $16.63. Then

CNBC

reported that

Merrill Lynch

(MER)

has sold its stake in Bloomberg. The stock advanced 13.4% to $28.

Other highfliers included

Washington Mutual

(WM) - Get Report

moving 25.5% to $4.53 and

Wachovia Bank

(WB) - Get Report

rising 17.4% to $10.65.

Capital One Financial

(COF) - Get Report

jumped 10.5% to $37.31 ahead of its earnings Thursday, and

E*Trade

(ETFC) - Get Report

shot up 25% to $3.13 on the back of solid earnings from broker Charles Schwab.

Even the losers were winners as

Goldman Sachs

(GS) - Get Report

was reportedly the subject of an

Securities and Exchange Commission

inquiry over market rumors associated with the downfall of Bear Stearns. However, the stock still moved up 9.5% to $172.86.

M&I Bank

(MI)

reported a loss of $393.8 million in the second quarter. The Milwaukee-based bank cited the deteriorating housing market. The stock still rose 17.3% to $13.60.