Morgan Stanley: Financial Winner

NEW YORK ( TheStreet) -- Morgan Stanley ( MS) was the winner among the largest U.S. banks during an abbreviated trading session on Friday, with shares rising over 2% to close at $11.82.

The Financial Times reported that Morgan Stanley purchased 15 loans worth £430 million loan along Australia's Gold Coast from Lloyds Banking Group PLC ( LYG), while Goldman Sachs purchased a £600 million portfolio of loans in New Zealand, also from Lloyds.

Goldman's shares rose 1% to close at $88.75.

The broad indexes weakened late in the session, but the KBW Bank Index ( I:BKX) rose 1% to close at 34.90, as bank stock investors shrugged off another poor showing from the Italian Treasury, as the average yield on Italy's auction of ¿8 billion in 6-month bills climbed to 6.504%, according to Bloomberg. Meanwhile there was a slight sell-off in U.S. 10-year paper, with the market yield up to 1.96% at 1PM.

Meanwhile, the average yield on 2-year Italian paper was 7.82%, which exceeded the yield on Italy's 10-year bonds by roughly 50 basis points, in a classic sign of a distressed market for sovereign debt.

Large banks seeing 2% gains on Friday included People's United Financial ( PBCT), which closed at %11.82, and Wells Fargo ( WFC), closing at $11.83.

Wells Fargo is among the large mortgage servicers that could get a break from the Federal Housing Administration, as part of the broad settlement between federal regulators and state attorneys general. The American Banker reported that the FHA may release the servicers from liability related to their loss mitigation efforts on FHA-insured loans.

Major U.S. banks seeing shares rise 1% on Friday included Bank of America ( BAC), closing at $5.17; BB&T ( BBT), at $21.18; Citigroup ( C), at $23.68; and U.S. Bancorp ( USB), which closed at $24.03.

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

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

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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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