( Citigroup and other stock prices revised in this update.) NEW YORK ( TheStreet) -- Citigroup ( C) was among the top performers of the financial sector Thursday after a report the government was planning to exit its 27% stake in the bank in a measured fashion. Citigroup shares rose greater than 5% following a report the Treasury Department is planning to unload its 27% stake in the bank through a preset trading plan that will follow a schedule for selling shares.
Bloomberg, citing people with direct knowledge of the matter, reported that the program may be announced next month, and is similar to those used by executives to protect themselves against accusations of insider trading. The Treasury would issue instructions on how many shares to sell, when to sell them and at what price in order to eliminate concern that the stock sales are based on non-public information. Separately, Citigroup has joined other lenders in participation of the government's 2MP program, which will help struggling borrowers modify second mortgages through the Home Affordable Mortgage Program. Citigroup shares were lately up 21 cents, or 5.1%, to $4.36.
Most other U.S. bank stocks were also trading higher. Bank of America ( BAC) shares were up 3.9% to $18.26, Wells Fargo ( WFC) added 3.2% to $31.85, JPMorgan Chase ( JPM) gained 2.2% to $45.92, Goldman Sachs ( GS) rose 2.1% to $178.07, and Morgan Stanley ( MS) advanced 0.7% to $29.56. On the downside, Ambac Financial ( ABK) shares fell sharply after the company said it may consider a negotiated restructuring of its debt through a prepackaged bankruptcy proceeding or may seek bankruptcy protection without agreement concerning a plan of reorganization with major creditor groups. This comes as the Office of the Commissioner of Insurance of the State of Wisconsin has established a segregated account for certain of Ambac Assurance Corporation's liabilities, primarily policies related to credit derivatives, residential mortgage-backed securities and other structured finance transactions, an immediate action to address AAC's financial position. Ambac did say it will have sufficient liquidity to satisfy its needs through the second quarter of 2011. Ambac Financial was lately down 17 cents, or 21.2%, to 62 cents. Fellow bond insurer MBIA ( MBI) slipped 2.5% to $6.24, one day after jumping nearly 15%. -- Written by Robert Holmes in Boston. Follow Robert Holmes on Twitter and become a fan of TheStreet.com on Facebook.
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