Magazine article American Banker

Bank Tech Stocks Gain Slightly for Week

Magazine article American Banker

Bank Tech Stocks Gain Slightly for Week

Article excerpt

Overcoming last week's jitters, bank technology stocks edged up slightly in a market that reflected the optimism surrounding the economy's short term future.

Observers said recent gains in the general market are a result of several factors, including a "relief rally" that was spurred by the Federal Reserve's holding the line on interest rates and a strong bond market.

William Loomis, analyst at Ferris, Baker Watts Inc., Baltimore, said investors will soon be "anticipating the January Effect," which is the historical rise in small-cap stock prices.

The Dow Jones industrial average fluctuated wildly Friday, a so-called "triple witching day" when options and futures on stock indexes expire concurrently. It ended up 179.53 points, and closed at 6,484.4

The Nasdaq Composite also rose 3.6 points, to 1,288.55. And Goldman, Sachs & Co.'s composite index of U.S.-traded stocks, which lists many bank technology firms, was up another 0.8%, to close at 119.02. Goldman Sachs' index has appreciated more than 39% this year.

In other news from bank technology firms, BankAmerica Corp. spun off about 32% of its credit card processing unit in an initial public offering.

The San Francisco-based bank sold 14 million shares of BA Merchant Services Inc. in a deal led by Goldman Sachs and co-managed by Montgomery Securities Inc., San Francisco, and Salomon Brothers Inc., New York.

The stock, priced between $14 and $16 per share, opened Thursday at $17.75. It closed Friday at $17.125.

In other news, Sterling Commerce Inc. has adopted a shareholder's rights plan that aims to protect investors in the event of a hostile takeover bid. …

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