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State Street

(STT) - Get Free Report

ended up the winner among large U.S. financials on Tuesday, with shares rising 4% to close at $33.48.

The broad indexes had another strong day, as investors cheered reports that European officials were considering allowing the European Financial Stability Facility to borrow from the European Central Bank.

Buffett gave no indication of how large a buyback might be, but the announcement is quite a turn of events, since Berkshire has never repurchased shares before.


KBW Bank Index


ended up down slightly on the day to close at 36.83, after being up over 3% earlier in the session.

Shares of

Bank of New York Mellon

(BK) - Get Free Report

rose 2.5% to close at $19.27.

Morgan Stanley

(MS) - Get Free Report

was also up 2.5% to close at $14.97, as earlier gains faded.


(STI) - Get Free Report

was up 2% to close at $18.70.

Tuesday's sector loser was

Bank of America

(BAC) - Get Free Report

, which pulled back from an earlier 4% gain to close at $6.48, down 2% for the session.

The Federal Housing Finance Agency's Office of Inspector General released a report after completing its investigation of the

loan review process

leading to Bank of America's December 2010 settlement of mortgage putback claims with

Freddie Mac


, finding that the FHFA's "senior management did not timely address significant concerns raised about the loan review process used by Freddie Mac," which could lead to billions of dollars in additional losses to the government-sponsored mortgage giant, and to U.S. taxpayers.


Bank of America, Citi Shrinkage Will Spread: Bankers >

Bank of America Settlement Slammed by Regulators >

5 Bank Stocks Trading Below the Basement >

Illinois Banks See Earnings Drag >

10 Regional Bank Stocks to Watch for Third-Quarter Earnings >

10 Banks on Solid Financial Footing >


Written by Philip van Doorn in Jupiter, Fla.

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Philip van Doorn


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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.