Financial stocks rallied for the second day in a row, with
second-quarter earnings report serving as a catalyst.
The third-largest bank in the U.S. saw its income drop to $2 billion from $4.23 billion a year ago, but its
even considering the bank's recent writedowns. The stock rose 13.5% to $40.80. The not-so-bad quarter was enough to fuel some optimism in the financial sector, pushing many small-cap names higher.
The JPMorgan news combined with another weak day for oil prices led the NYSE Financial Sector index to advance 4.5% to 6,268.98.
Investors shrugged off the weak results at
, which reported a net loss of $97.9 million for the quarter. The mortgage insurer also said that it didn't expect to report a profit until next year. But it did record total revenue of $424.5 million, an increase of 15%, due to rising policy sales. Buyers pushed the stock up 43.6% to $5.89
shot up 16.4% to $208.26 after the investment management company posted a 23% increase in second-quarter profits due to a sharp increase in assets under management. The company's also making a buck on helping liquidate troubled portfolios for clients. In addition to that, BlackRock said it had reached an agreement with
( MER) that would strengthen their relationship. Merrill owns a stake in BlackRock, and it had been rumored the brokerage may sell it in order to raise capital. Merrill's shares jumped 9.8% to $30.73.
Other big movers included a whopping 68% gain for micro-cap
. Rumors were swirling that naked short-sellers, afraid of getting caught, were racing to cover their short positions. The savings and loan stock jumped $1.66, or 75%, to $3.88.
Montgomery, Ala.-based bank
( CNB) catapulted 31% to $5.84 even after reporting a second-quarter loss of $8.9 million. Problem loans and charge-offs led to the loss as total assets dwindled by $1.3 billion. JPMorgan, however, upgraded the stock to overweight.
Another winner for the day was
as it delivered second-quarter profits above Street expectations. Profits jumped 12% with gains attributed to the buyout of Sky Financial Group offsetting the rising amount of bad loans. Investors handsomely rewarded the bank's performance by advancing the shares by 40.3% to $7.98.
Securities regulators raided the St. Louis headquarters of
on Thursday, but that didn't stop shareholders from buying the stock. Regulators said they were looking for information about sales practices, the auction rate securities market and marketing strategies. The stock galloped 27.5% to $13.44.
said it will work with the U.S. to identify tax cheats. It will also discontinue offshore banking and securities services to U.S. residents through its branches. The stock gained 3.5% to $20.52.
One of the few banks actually trading down on the day was
Bank of New York Mellon
. Its second-quarter earnings dropped by 31% to $309 million from $445 million a year ago. The blame was laid squarely upon investment securities writedowns. The stock tumbled 7.2% to $35.42.