Investment Banks: Asia Winners

NEW YORK ( TheStreet) -- Morgan Stanley ( MS) was the winner among stocks of large U.S. banks on Monday, with shares rising over 2% to close at $27.44.

The KBW Bank Index ( I:BKX) was up 0.5% to close at 63.48, with all but six of the 24 index components ending with gains.

Shares of Goldman Sachs ( GS) were up 2% to close at $159.49. Citigroup ( C) was also up 2% to close at $50.09.

The broad indices all showed gains of 1% or more, after two pieces of strong economic news out of Asia.

China saw a 7.2% increase in exports during August from a year earlier, according to an announcement on Sunday by China's General Administration of Customs.

Japan's Cabinet Office on Monday revised its estimate of second-quarter gross domestic product growth for the world's third-largest economy to an annual rate of 3.8% from its preliminary estimate of 2.6%. Optimism in Japan was no doubt boosted over the weekend when Tokyo won its bid for the 2020 Summer Olympics.

"Stop underestimating this turn in China already," Jim Cramer wrote in a piece originally published by RealMoney .

Cramer added that "China was the primary driver of so many stocks, even as it might not have been a primary driver of the actual earnings. For example, Caterpillar ( CAT) doesn't have all that much business in China, but it is the place that was most over-inventoried."

Shares of Caterpillar were up 3% to close at $85.59.

Cramer also wrote that investors should "stop worrying" over President Obama's proposal for Congressional approval of an attack on forces loyal to Syrian president Bashar Assad, to punished alleged chemical weapons use. "That government is despised worldwide, and Obama will not hesitate to take unilateral action if he has to. He also probably has the votes, even though the media says he doesn't," he wrote.

Back home, the Federal Reserve reported that consume credit in the United States increased by $10.4 billion during July, for an annual growth rate of 4.4%. Analysts polled by Thomson Reuters had expected a consumer credit expansion of $12.3 billion. The consumer credit growth number for June was revised downward to $11.9 billion from $13.8 billion.

Revolving credit -- mostly credit card debt -- continued its long-term decline at an annual pace of 2.6% during July, while non-revolving debt expanded at an annual pace of 9.5%.

Investors are watching the economic reports for clues on how much the Federal Open Market Committee might lower monthly Federal Reserve bond purchases after the next meeting of the policy committee on Sept. 17-18. The Fed has been making monthly purchases of $40 billion in long-term mortgage-backed securities and $45 billion in long-term U.S. Treasury bonds since last September, as part of its "QE3" program to hold down long-term interest rates.

The market has anticipated a curbing of Federal Reserve bond buying by sending the yield on 10-Year U.S. Treasury bonds to 2.91% on Monday from 1.70% at the end of April. The yield on the 10-year was down three basis points on Monday.

Major economic reports coming up this week include August retail sale, on Friday.


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

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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 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.