Countrywide's ( CFC) massive surge spurred the financial sector higher following a considerably volatile day.
Shares of the battered mortgage lender rocketed more than 50% after The Wall Street Journal reported that it's in advanced talks to be bought out by Bank of America ( BAC). Countrywide shares were soaring $2.78 to $7.90, taking back all of its losses from an excruciating one-two punch this week -- denied bankruptcy rumors on Tuesday and ballooning December foreclosures on Wednesday. Meanwhile, Citigroup ( C) and Merrill Lynch ( MER) both enjoyed swings into the green after the Journal reported that the struggling New York firms are in talks for more foreign-derived cash injections. Citi, which in November announced a big Middle Eastern cash infusion , could get as much as $10 billion more from foreign governments, said the Journal. And Merrill's handout, expected to follow Citi's lead in partially coming from a Middle Eastern government, could total between $3 billion to $4 billion. Last month, Merrill sold chunks of itself to Singapore-based Temasek and U.S. -based Davis Selected Advisers, soon after which Britain's The Observer reported that it was already in more cash-infusion talks with sovereign wealth funds both in China and in the Middle East. Citi shares were up 2% to $28.03 as Merrill added 2.8% to $51.90. Elsewhere in positive territory, Blackstone ( BX) skipped 11.7% higher after saying it will buy back $500 million in unspecified "units," and that it will take out alternative asset manager GSO Capital Partners for up to $930 million in cash and units. Of that purchase price, $620 million will be paid on closing, and the remainder will be contingent on certain earnings milestones over the following five years. Shares of the New York asset manager ramped up $2.12 to $20.22 in heavy trading.