Updated with market close information and Judge Rakoff's rejection of Citigroup's settlement with the SEC.
NEW YORK (
ended up the winner among large U.S. financial stoks on Monday, with shares rising 6% to close at $25.05.
Investors shrugged off U.S. District Judge Jed Rakoff's rejection of a proposed $285 million settlement of
Securities and Exchange Commission
securities fraud charges against Citigroup, saying that the settlement was "neither reasonable, nor fair, nor adequate, nor in the public interest," since Citi wasn't required to admit wrongdoing, according to a
Citi had agreed agreed in October to pay $285 million to settle charges that
Citigroup Global Markets
had peddled a $500 million collateralized debt obligation -- for which it assisted in the selection of assets making up the underlying portfolio -- before shorting the mortgage-related assets it had just sold. The judge said that the court had not been "provided with any proven or admitted facts upon which to exercise even a modest degree of independent judgment."
U.S equities pulled back from earlier gains, with the Dow Jones Industrial Average seeing 2% gains, while the Nasdaq index was up nearly 3%, following a strong kickoff to the holiday shopping season, with U.S. store sales on Black Friday rising 6.6% year-over-year to $11.4 billion, according to ShopperTrak, with online sales increasing 24% from a year earlier, according to IBM's Coremetrics scale.
The holiday sales trumped the mixed news out of Europe. The
Wall Street Journal
reported that that European officials were negotiating a new agreement to give Europe more direct power over euro-members' budgets, in order to persuade the European Central Bank to take more action to resolve the sovereign debt crisis.
In its semi-annual report, the Organization for Economic Cooperation and Development said that the euro zone had already fallen into recession.
of "very negative rating implications" for European countries, saying that the "the political impetus" for a solution to the debt crisis in the eurozone "may only emerge after a series of shocks."
KBW Bank Index
rose 3% to close at 35.85, with the 24 index components rising at least 1%.
rose nearly 5% to close at $41.85.
First Niagara Financial Group
was up 4.5% to close at $8.61.
Large banks seeing shares rise 4% included
Fifth Third Bancorp
, which closed at $11.36, and
, closing at $13.80.
Major U.S. banking names seeing shares rise 3% included
, closing at $21.83;
, at $23.73;
, at $4.84;
, at $24.68; and
, which closed at $24.15.
Written by Philip van Doorn in Jupiter, Fla.
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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 TheStreet.com 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.