Frozen lending?
Billions of dollars in government bailout funds? Plummeting market
capitalizations? All of these banking problems and more can be washed
away with a few choice words from an optimistic CEO.
Citigroup Inc.'s (NYSE:C) CEO
Vikram Pandit did so on Tuesday when he helped spark a massive market
rally and drive double-digit stock gains at Citi as news broke
of his letter to employees boasting of a stellar quarter so far for the
otherwise battered bank. J.P. Morgan Chase & Co. (NYSE:JPM) CEO
Jamie Dimon kept the love fest going on Wednesday at a U.S. Chamber of
Commerce economic conference in which he said he sees "modest signs" of
economic recovery, citing the recent surge in bond trading.
J.P.
Morgan shares ticked up 90 cents or 4.62% to close at $20.40 on Wednesday,
and Citi continued to rise, climbing a modest 9 cents or 6.21% to $1.54
per share.
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The broader market did not seem as convinced about
Dimon's words as his own shareholders as the Dow Jones Industrial
Average ended almost flat, closing up 3.91 points at 6,930.40 on
Wednesday.
And while the banking industry may be improving, the same
can't be said for the deal marketplace (despite a few pharmaceutical
deals) as companies across a multitude of sectors seek to sell assets
to raise needed cash amid tight times, but have had difficulty.
Aluminum
giant Alcoa Inc. (NYSE:AA) announced 13,500 job cuts and other
restructuring measures in hopes of saving about $450 million annually
before taxes as it reported its first quarterly loss in six years. On
Tuesday, CEO Klaus Kleinfeld told The Wall Street Journal he wouldn't
rule out any means of raising cash, including selling a stake to
another company. Alcoa shares skidded down 36 cents or 5.88% to close at
$5.76 on Wednesday.
Mortgage insurer Radian Group Inc. (NYSE:RDN)
said in a regulatory filing Tuesday it may sell its stake in Sherman
Financial Group LLC as it explores capital-raising initiatives. After
closing up 27 cents or 24% at $1.39 a share on Tuesday on the news, Radian
shares reversed over half of the gain Wednesday with a 15 cent or 10.79%
decline to close at $1.24. - Michael Rudnick
