Shares in US Financials rally after crisis
Shares in US financials have begun a powerful rally, which has seen shares in many US banks leap by double percentile figures.
The rally began just before 6pm GMT and 1pm New York time.
Companies previously hit hard by investor fears on their mortgage assets are seeing the strongest rebound, with mortgage insurers and US banks with significant mortgage assets showing incredible growth.
Over the past three weeks, there has been an ebbing of investor confidence, with banks such as Wachovia (WB) seeing their share price decline over this period from $18 a share to less than $10 before the rally.
However, over the past 2 hours Wachovia shares have suddenly leapt over 50% to almost $14.
It’s hard not to read this as a returning market confidence, previously shattered by the collapse of Lehman Brothers.
Here’s a sample of shares I’m monitoring at present in the US financials:
Ambac Financial Group, Inc. (ABK) +5.20%
Assured Guaranty Ltd. (AGO) +20.32%
Bank of America Corporation (BAC) +12.21%
Citigroup Inc. (C) +11.19%
First Horizon National (FHN) +19.73%
Huntington Bancshares (HBAN) +14.13%
MGIC Investment Corp. (MTG) +45.22%
National City Corporation (NCC) +20.00%
Radian Group Inc. (RDN) +29.46%
Regions Financial Corporation (RF) +23.92%
Security Bank Corporation (SBKC) +50.52%
SunTrust Banks, Inc. (STI) + 12.49%
Synovus Financial Corp. (SNV) +18.15%
The PMI Group, Inc. (PMI) +15.24%
Wachovia Corporation (WB) 53.84%
Washington Mutual, Inc. (WM) +20.40%
Wells Fargo & Company (WFC) +12.86%
XL Capital Ltd. (XL) +5.12%
Even Goldman Sachs (GS) and Morgan Stanley (MS) are showing recovery, after falling more than 15% and 25% respectively earlier today.
While Wachovia and WaMu had seen strong gains earlier in the day on merger and buy-out speculation, it looks as though the massive amount of central bank money swilling around the financial market is helping to woo investor confidence that they will not allow the markets to collapse, and that there is little chance of the US banking system being wiped out.
ADDED: The Dow Jones is now up over 4% on the day. Bloomberg are reporting that from trough to peak it represents the strongest rally on the Dow Jones in 6 years.