Magazine article American Banker

Banks Fly High with Market as Dow Hovers near 9,000

Magazine article American Banker

Banks Fly High with Market as Dow Hovers near 9,000

Article excerpt

Bank stocks bounced back Thursday in a market surge that took the Dow closer to a record 9,000.

BankAmerica Corp. gained $2, to $85.75, Chase Manhattan Corp. rose $4.0625, to $139.3125, and Republic New York Corp. was up $3.50, to $135.6875.

Smaller banks joined the exuberance, with Bank of Oklahoma Corp. up $1.25, to $50.125, First Hawaiian rising 75 cents, to $40.25, and First Virginia Bancshares increasing $1.375, to $57.4375.

One exception was Astoria Financial Corp., whose shares plunged $2.0625 in the last half hour of trading on rumors that the thrift is close to acquiring Long Island Bancorp. Long Island shares rose $1.5625, also mostly in the last half hour of trading.

"The market is upbeat" on sustained strength in the economy and indications that first-quarter results will meet or exceed expectations, said Marni Pont, banking analyst at Keefe, Bruyette & Woods.

Banks are playing a solid role in the process and should continue to do so, Ms. Pont said.

The Dow Jones industrial average rose 1.33%, or 118.32 points, to 8,986.64. The Standard & Poor's bank index was up 1.27%, the Nasdaq bank index gained 0.54%, and the S&P 500 climbed 1.07%.

Star Banc rose $1.5625, to $61.125, after Lori Appelbaum, a bank analyst at Goldman, Sachs & Co., reaffirmed a "recommended list" rating and forecast a 24% surge in share value over the coming year.

Star Banc has a "stellar growth strategy" that should deliver superior growth and profitability, Ms. Appelbaum said. …

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