(Updated with final share price movements throughout)
NEW YORK (
) -- Financial stocks were mixed Thursday, with
American International Group
on the rise again.
-- the so-called "zombie" stocks, as the government owns roughly an 80% stake in each -- were rising without any company-specific news circulating. Reasons offered for the two-day jump ranges from short covering to speculation that the fiscal health of each may be stabilizing. AIG is due to report earnings Friday, with Freddie and Fannie expected to post quarterly results not long after.
Additionally, a report in the
on Thursday also indicated that the government is moving closer to a plan to restructure AIG, Freddie and Fannie and get them back into private hands.
AIG finished higher by 53 cents, or 2.4%, to $22.53, bringing its two-day rally total to 66%. Freddie rose 5% to finish at 84 cents, and Fannie climbed 6.8% to 79 cents.
Bank of America
was also among the winners despite a
Wall Street Journal
report that the bank's loss projections for
increased by almost $2 billion two days before shareholders approved the acquisition of the brokerage. The bank's executives, however, concluded the losses weren't severe enough to disclose publicly before the vote.
Rochdale Securities analyst Richard Bove said his net conclusion is that shareholders ultimately benefitted from the deal, as shares are 30% higher than they were on Dec. 29, when the new information concerning Merrill Lynch's losses were disclosed to BofA's management.
"The point here is clear. The Merrill merger appears to have been additive to the bank, not a negative," Bove wrote in a research note. "However, there is a politician/press vendetta to remove
CEO Ken Lewis from his position. In essence he is supposed to be fined and fired for adding value to the company's earnings and its stock price."
In other BofA news, the
reported that a U.S. District Court judge refused to sign off on a consent decree between the
Securities and Exchange Commission
and the bank, saying that approving the deal without a hearing would leave the public in the dark regarding a key aspect of the Wall Street bailout.
On Monday, BofA said it will pay $33 million to settle charges with the SEC. The SEC on Monday charged BofA with making "materially false and misleading statements" in connection with its acquisition of Merrill Lynch.
In a research note, Keefe Bruyette and Woods analysts reiterated an outperform rating on BofA and raised the stock price target to $19 from $16.50. The firm said that despite a 36% rise in shares in the last three weeks, BofA still offers significant value to shareholders.
BofA shares tacked on 4 cents, or 0.2%, to $16.70. Among other bank stocks,
slipped 0.2% to end the day at $27.97, while
slid 2.5% to $40.75.
In separate research notes, KBW analysts downgraded
Fifth Third Bancorp
to market perform from outperform on valuation. Fifth Third shares closed down 5.8% to $9.41, and SunTrust lost 2.8% to $20.88.
shares gave back 50 cents, or 1.6%, to finish at $30.55 after the bank said Thursday it paid $950 million to buy back from the government warrants issued as part of the Troubled Asset Relief Program. In June, Morgan Stanley repaid the $10 billion it borrowed under TARP.
, meanwhile, rose 6.2% one day after shares broke a one-day volume record on the
New York Stock Exchange
with 347 million shares changing hands. On Wednesday, Citigroup sold $2.5 billion in five-year non-guaranteed notes. Shares added 22 cents to $3.80.