A much-needed cash infusion for
sent the stock soaring Monday and helped financial stocks move into positive territory.
A report in
The Wall Street Journal
Monday said that Fort Worth, Texas-based private equity firm
would be investing $5 billion in the beleaguered bank, which has been hammered by its aggressive foray into the mortgage market. The deal would give TPG a mix of common and preferred stock adding up to less than 25% of WaMu, the paper said. Shares of the Seattle-based mortgage bank soared 29.3% to $13.15.
In other deal news,
Discover Financial Services
signed an agreement with
to purchase Diners Club International for $165 million. Discover shares rose 5.5% to $18.09 on the news and Citigroup jumped 52 cents, or 2.2% to $24.60. Citigroup, like WaMu, could use the cash as it recorded a loss of $9.8 billion in the fourth quarter.
ticked up on news that it was serving as lead in a $250 million revolving credit line for
G-III Apparel Group
. G-III is known as a distributor of outerwear and sportswear under licensed brands like the NFL and NBA and private labels, such as Tommy Hilfiger. CIT climbed 3% to $15.25 and G-III rose fractionally to $14.
The Bank of New York Mellon
climbed 6.6% to $43.37 after it started to fight back against a $22.5 billion Russian lawsuit. BoNY argued that a Russian civil court can't enforce U.S. criminal laws against it and also questioned the amount of the claim. Russia's Federal Customs Service had been after BoNY for compensation since a bank vice-president was convicted of laundering more than $7 billion form Russia.
Swiss banking got a boost after Merrill Lynch upgraded
from neutral to buy based on valuation. "Having acknowledged its legacy problem with a sizable $19 billion writedown and announced a 15 billion Swiss franc capital-raising, we think investor focus will move away from the balance sheet and focus will return to the underlying value of UBS," the analyst wrote. UBS moved up 3.7% to $34.88.
Financial Sector Index advanced 51.83 to 7,689.98.
On the down side, government-sponsored mortgage giants
( FNM) and
( FRE) were mired in the red all day. Both mortgage lenders declined after announcing planned bond sales. Fannie went down 1.6% to $29.85 and Freddie lost 3.6% to $26.60.