Citi rally leaves Thornburg behind
Citi’s (C) rising tide is lifting the financial sector. Bank and brokerage stocks soared after Citi posted a first quarter that wasn’t as bad as some analysts had feared. Citi was up 8%, while rivals Bank of America (BAC) and JPMorgan Chase (JPM) rose 5% and 3%, respectively. Among brokerages, Goldman Sachs (GS) was up 5% and Merrill Lynch (MER) was up 3%.
And the rally wasn’t limited to the quality names. A number of firms that have seen their shares tumble this year due to worries about the health of their big mortgage portfolios also jumped: Countrywide (CFC) surged 9%, Indymac (IMB) rose 5% and online broker E*Trade (ETFC) soared 11%. Even Bear Stearns (BSC), due to be taken out of its misery later this year by JPMorgan Chase, rose 3%, roughly in line with the value of the all-stock buyout deal.
The one firm that failed to participate in the rally was Thornburg Mortgage (TMA), the Santa Fe, N.M., jumbo-mortgage lender that late last month sold a 90% stake to investors to stave off a bankruptcy filing. Shares were down 2 cents in midday trading at $1.29 apiece. Looking at the bright side, though, the warrants that the Thornburg investors got giving them the option to buy shares at a penny each are still firmly in the money.
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