Financial stocks rocketed on Wednesday, taking even sharper benefit from
Vice Chairman Donald Kohn's hope-stoking comments than did the rest of the market.
Kohn said policymakers need to be "flexible and pragmatic" in dealing with the ongoing market calamities, and that the Fed should be "nimble" in its responses to new developments. That worked to
encourage those who pine for another rate cut.
The NYSE Financial Sector Index careened higher by 340.81 points, or 4.2%, to 8,558.49. The KBW Bank Index soared 5.3% to 95.18.
, which had a
lackluster day yesterday despite getting a
$7.5 billion cash infusion from the Abu Dhabi Investment Authority, today blasted 6.5% higher at $32.29.
Joining it in positive territory, together with the vast majority of financial stocks, was
reported that the New York brokerage is expected to
take over the floor-trading operations of
Van der Moolen's
shuttered U.S. specialist business at the
New York Stock Exchange
VDM announced earlier this month that it would
shut down the unit. Lehman jumped $4.95, or 8.3%, to $64.85.
, meanwhile, gained ground after
The Associated Press
reported that the beleaguered broker will
cut 650 jobs, in addition to the 310 mortgage-business positions it eliminated in October. An internal company memo was cited. Shares tacked on 4.3% to $99.50.
And a Fox Pitt, Kelton analyst said
will probably garner a buyout offer of between $10 and $11 a share, according to
. That's down substantially from the analyst's prior $18 estimate, which was issued before recent
upheaval at the online broker, but shares still leapt 7.5% to $5.28.
E*Trade is believed to be currently
in takeout talks with rivals
, up 2.7%, and
which closed 6.5% higher.
was trending higher despite yesterday's postclose announcement that it expects to set aside
$1.4 billion pretax in order to cover losses from its riskiest mortgage-lending channels. It has ceased originating and acquiring new loans through those channels, said the bank, and this $11.9 billion "liquidating portfolio" constitutes 3% of Wells' total loans as of Sept. 30.
Shares had taken an after-hours slide Tuesday on the news, but today they climbed 3% to $30.72.
Among few financial decliners today was credit-card purveyor
, which was hit with a downgrade to underperform at Friedman Billings. Shares of the Pennsylvania-based company slid 13.9%, or $1.54, to $9.52.