Bank shares snap back from recent slide

Shares of European financial institutions see a major boost in their prices with most of them recording gains of at least 5%.

By Trefis Aug 7, 2012 1:56PM
TrefisInvestors overcame their battered confidence levels inflicted on banks' share prices toward the end of last week with frenzied buying on Friday. The market had reacted adversely to the fact that the European Central Bank (ECB) did not come up with an immediate measure to inject capital into the deteriorating Spanish and Italian economies by purchasing government bonds -- something the investors realized on Friday.

Consequently, shares of European banks saw a major boost in their prices Friday with most of them recording gains in excess of 5% over trading throughout the day. A better-than-expected U.S. job report also set the mood right, easing much of the pressure on U.S. banks' shares. 


Shares of Deutsche Bank (DB) jumped a little more than 10% Friday, followed by a 7% hike in price for the shares of RBS (RBS). Barclays (BCS) and Credit Suisse (CS) also saw their shares gain more than 6% value. Among American banks, Morgan Stanley (MS) gained the most with its share prices rising by 5.8%. Shares of BNY Mellon (BK) also gained a healthy 5.2%. The banks have continued their recovery this week, as well.


Deutsche Bank Stock Break-Up

Even as the Spanish debt situation spirals out of control with several regional governments in the country declaring bankruptcy, investors took hope last fortnight from statements by ECB chairman Mario Draghi as well as German Chancellor Angela Merkel and French President Francois Hollande of immediate action from the Eurozone's regulatory bank. But sentiments waned with each passing day over last week when no such steps were implemented. Consequently, investors ended up selling off bank shares in large numbers.


Investors, however, noted the significant decline in the value of almost all banks -- more particularly for the European banks -- and ended up buying them back on Friday. No doubt, the U.S. job report that was published that day also helped investors. The country's job situation turned out to be better than expected as almost 163,000 new jobs were added in the month of July -- topping economists' expectations of a 95,000 increase in job vacancies for the period.


More from Trefis 

0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

123
123 rated 1
262
262 rated 2
480
480 rated 3
651
651 rated 4
649
649 rated 5
629
629 rated 6
616
616 rated 7
496
496 rated 8
346
346 rated 9
111
111 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
EXCEXELON CORPORATION9
TAT&T Inc9
VZVERIZON COMMUNICATIONS8
CTLCENTURYLINK Inc8
AAPLAPPLE Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.