Financial stocks were on the rise Friday, as inflation data in line with expectations eased concerns that the
might raise its interest rate target, while beaten down
received some words of support.
Financial Sector Index advanced 129.85 to 6,916.71 after the Labor Department reported that the consumer price index rose by 0.6% last month. While that was its biggest jump since last November, but excluding increases in food and energy prices, the measure jumped only 0.2%.
Lehman Brothers reversed its recent skid, as
Larry Fink told
the investment bank has "a history of being a team, a place of focus, of working out their situations, of having confidence in the marketplace." BlackRock has been rumored to be a potential buyer of Lehman, but the company wouldn't comment on the rumor. The stock jumped 13.7% to $25.81.
also ticked up $4.7% to $38. The stock price was dismissive of a Lehman analyst that came out on Friday and suggested the brokerage may have to raise additional capital and will report a second quarter loss.
released an uplifting report on monthly market activity in May. Schwab reported that total client assets were up 6% and new assets totaled $12.2 billion. Client trades rose 15%. Happy investors pushed the stock up 4.9% to $22.39.
Beleaguered Swiss bank
said on Friday that almost all of its newly issued stock had been sold. The last 5 million new shares will be sold in the open market. UBS has been plagued with toxic financial instruments that it has been trying to unload. The offering was meant to generate $15 billion in capital. Shares rose 6.8% to $24.67.
On the down side,
tumbled 1.1% to $13.48 after the futures broker said a bank syndicate agreed to provide a $450 million credit facility that will be used to refinance a bridge loan. The company also acknowledged two pending investigations and that it had established a reserve in the event of any penalties from the probes.
continued its slide after pricing two offerings for $1.65 billion. The bank is dealing with an adverse legal ruling and needed the money to shore up its balance sheet. Investors weren't happy that it went beyond the $1.5 billion originally sought and sent the stock as low as $11.46, but it closed down 2.1% to $11.73.
The big loser for the day was
Fifth Third Bancorp
, which hit a 12-year low of $12.09. A BMO Capital Market analyst opined that the regional bank needed to cut its dividend and raise fresh capital. He also downgraded the bank to market perform from outperform and lowered the target price from $25 to $16. The stock plunged 10.4% to $13.17.