Friday is the day after the stress test and some banks are firming up plans to raise capital. Bank of America Corp. (NYSE:BAC), Wells Fargo & Co. (NYSE:WFC) and Citigroup Inc. (NYSE:C) are the banks with the largest capital needs, but ironically all finished as big winners. Overall, the bulls came out of the gates quickly with the Dow finishing up 164.80, or 2.0%, to 8,574.65, and the Nasdaq closed up 22.76, or 1.3%, to 1,739.00.
BofA finished up 4.89% as the company registered to sell an additional 1.25 billion shares of common stock, which could be worth up to $11 billion, as well as sell assets. Wells Fargo finished up 13.81% as it said it would attempt to raise $7.5 billion in a stock offering. The San Francisco-based bank, which needs to raise $13.7 billion, was the most surprising one that showed up on the stress test list, according to The Deal's Matthew Wurtzel. It's been lauded by analysts and the Street as a financially sound bank during much of the economic crisis.
Lastly, Citi finished up 5.51% as the stress test revealed that the bank needed $5.5 billion. The company said it is looking to exchange another $5.5 billion of preferred securities for common stock to fill its capital shortfall. - Gerald Magpily
Continue reading below
For the funds sake the banks are preparing for the test and have passed it and got the concessions. Its great. I am hearing for the first time about it. Keep rocking.Document Repository