Magazine article American Banker

Bargain Hunters Spark Bank Rally

Magazine article American Banker

Bargain Hunters Spark Bank Rally

Article excerpt

After falling most of the day Thursday, bank stocks did an about-face and rallied late in the session. American Banker's index of 50 largest banks rose 0.49%, and its index of 225 banks rose 0.91%. The biggest gainers of the day included Firstar Corp., up 93.75 cents, or 4.36% to $22.4375; Wells Fargo & Co., up $1.0625, or 2.56% to $42.50; and Fifth Third Bancorp, up $1.625, or 2.44% to $68.1875. Traders said that bargain-hunting investors looking for low-value stocks appeared to be behind Thursday's late session interest in bank stocks. The enthusiasm enabled banks to outpace the Dow Jones industrial average, which fell 0.02%. Interest rate jitters had held the group in check early in the day, said Scott J. Brown, chief economist at Raymond James & Associates of St. Petersburg, Fla. Concern about the pace of U.S. economic growth was exacerbated by a Commerce Department report on Thursday that orders placed with U.S. manufacturers in May posted the largest gain in more than seven years as demand increased for electronics, transportation equipment, and chemicals. Orders rose 4.1% from a month earlier, to a seasonally adjusted $385.8 billion. Investors are also on edge heading into today's June employment report, which could indicate a fast-growing economy and lead to more interest rate hikes from the Federal Reserve later in the year. Mr. Brown expects the policymakers to raise interest rates 25 basis points at their Aug. 22 meeting. They have already raised rates six times since June 1999. "We are in this big gray area," Mr. …

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