MF Global: Financial Loser

NEW YORK ( TheStreet) -- MF Global ( MF) was the loser among U.S. financials on Wednesday, with shares dropping 9% to close at $1.70, after reporting a $191.6 million third-quarter loss.

The Wall Street Journal reported that MF Global -- led by former New Jersey governor and former Goldman Sachs CEO Jon Corzine - was exploring "strategic options," including a sale of the company.
Goldman Sachs ( GS) was the winner among large U.S. financial stocks on a very strong day for the sector, with shares rising 6% to close at $106.33.

Rochdale Securities analyst Richard Bove said in a note on Wednesday that Goldman Sachs could benefit from the plight of MF Global, with the analyst saying that both Goldman and Citigroup ( C) were "logical buyers" for the trading outfit, which is led by former Goldman Sachs CEO Jon Corzine.

Citi's shares rose 1% to close at $31.16.

In other Goldman-related news, former board member Rajat Gupta was charged with five counts of securities fraud and one count of conspiracy, for allegedly supplying inside information to Galleon Group founder Raj Rajaratnam, who was sentenced early this month to 11 in years in prison for insider trading.

Thomas Gorman -- a partner at the international law firm Dorsey & Whitney's Washington D.C. office. -- said that Gupta's fate might differ from that of Rajaratnam, because "the evidence to date suggests that Gupta did not trade or profit from any trading. Under those circumstances this might give him a defense that although he told Raji about the information it was done so in trust and confidence and not to be used for trading," and that "Gupta could claim it was misappropriated from him."

The Dow Jones Industrial average rose 162 points after the German parliament passed a resolution approving a proposal to leverage the European bailout fund, although an overall deal among European leaders to expand the eurozone emergency rescue fund may be delayed until the end of November.

The Economics and Statistics Administration on Wednesday said that U.S. sales of new single-family homes in September were 313,000, at a seasonally adjusted annual rate, which was a 5.7% increase from the revised August level, but were down 0.9% from a year earlier.

The KBW Bank Index ( I:BKX) rose 2% to close at 39.58, with all 24 index components seeing gains.

Shares KeyCorp ( KEY) rose 5% to close at 7.29

Large banks seeing 4% gains on Wednesday included Comerica ( CMA), which closed at $25.22, and First Niagara Financial Group ( FNFG), closing at $8.88.

Big banking names seeing shares rise 3% included Capital One ( COF), closing at $44.60; Fifth Third Bancorp ( FITB), at $11.99; Huntington Bancshares ( HBAN), at $5.18; Regions Financial ( RF), at $3.83; SunTrust ( STI), at $19.39, and U.S. Bancorp ( USB), closing at $25.48.

Shares of MetLife ( MET) rose 1% to close at $33.15, even though the company announced that the Federal Reserve had rejected its proposal to increase its annual dividend and resume share buybacks.

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-- Written by Philip van Doorn in Jupiter, Fla.

To contact the writer, click here: Philip van Doorn.

To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.

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.

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