Financial stocks rallied Tuesday, helping to lift the broader market, with beaten-down regional banks and bond insurers among the biggest winners.
The NYSE Financial Sector index advanced 4.4%, and the KBW Bank index was up 7.3%.
( ABK) both advanced as investors crossed their fingers that more policy holders would follow
( MER) lead and try to
offload hard-to-sell securities
MBIA gained 12.4% to $4.80, and Ambac jumped 15.5% to $2.01.
managed to move up as well, even though a Deutsche Bank analyst suggested it could see even more writedowns. Citigroup climbed 3% to $17.94.
Elsewhere, small-cap bank
East West Bancorp
traded in the green zone as it climbed 11% to $11.88. The California-based bank was upgraded to buy from neutral by D.A. Davidson.
Another regional bank that was enjoying a positive day was
First Horizon National
, rising 10.6% to $9.29. The Memphis-based bank has lost 73% of its value over the last year and investors have been trying to pick the bottom in the stock.
ticked up 3% to $36.44 after saying it would acquire 13% of corporate travel company
. Both companies have exclusive deals to promote their services with each other. The deal is worth approximately $251 million.
were also stronger.
Meanwhile, a day after Merrill said it would raise $8.5 billion in new capital and sell a big portion of its collateralized-debt obligations, shares were little changed, falling 14 cents to $24.19.
dropped after saying it would try to get $2.5 billion through a sale of common stock and convertible securities. Moody's also said that it was placing XL's senior debt rating on review for a potential downgrade. The stock fell 5% to $17.46.