When will it be enough? When will Wall Street have a positive reaction
to the White House's moves to pour more and more into the banks? A
positive reaction was nowhere to be found on Thursday, as the
Dow Jones Industrial Average dropped 88.81 points to close at 7,182.08
despite news that Obama's proposed budget anticipates setting aside up
to $250 billion more for the existing $700 billion bank bailout.
The
banks saw mixed trading on Thursday, and with the hopeful news came a
reminder of the banks' troubles as the FDIC reported that U.S. banks
lost $26.2 billion in the fourth quarter of 2008, the first quarterly
loss since 1990.
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Citigroup Inc. (NYSE:C) fell 2.38% to close at $2.46, Bank
of America Corp. (NYSE:BAC) jumped 3.1% to $5.32, J.P. Morgan Chase & Co.
(NYSE:JPM) increased 6.07% to $23.05, and Goldman Sachs Group Inc. (NYSE:GS) climbed 2.48% to
$92.15.
But enough about the banks. While limited, there does
exist other dealmaking out there where Uncle Sam is not involved.
Power utility Exelon Corp. said Thursday that it has received solid
support for its hostile pursuit of independent power producer NRG
Energy Inc., with the owners of 51% of its shares accepting the tender
offer. NRG shares jumped 4.46% to $19.70 per share.
And there is even
dealmaking in the banking sector that does not directly involve big government.
Bank of America's climb Thursday may be due in part to news it is
considering selling First Republic Bank, a private bank it inherited
through its acquisition of Merrill Lynch & Co., The Wall Street
Journal reported late Wednesday
Among possible buyers for First
Republic are Morgan Stanley (NYSE:MS) and Goldman Sachs. Morgan Stanley shareholders don't
seem too interested in the prospect of the bank spending money on any
acquisition in these capital-strapped times, as its shares slipped
1.98% to $21.33. Maybe Morgan shareholders would prefer the rumor that First Republic's celebrity clients might take it private instead. - Michael Rudnick
