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Huge Trading Volume on “Failed Financials”
Suddenly, It’s Like Last Summer: “Failed Financials” Jump on Huge Volume
by Peter GorensteinLet’s face it; it’s been a slow week on Wall Street. …Unless you’re trading the ‘failed’ financial stocks.
Volume in Citigroup, AIG, Fannie Mae and Freddie Mac has been off the charts. Tuesday, they accounted for 25% of all trading volume on the NYSE. And, unlike last year, it’s not just the shorts that want in on the action. Citigroup is trading near $4 per share, a 4-month high. AIG was up as much as 12% today alone and nearly 50% in March. Meanwhile, Fannie Mae and Freddie Mac both outpaced the market today on about double their average trading volume.
What’s behind the heavy interest?
Diane Garnick, investment strategist with Invesco says it’s in part due to Greece. “We’re seeing the sigh of relief happen throughout the markets,” now that the worst fears of a Greece debt failure have abetted, she says. “The primary beneficiaries of Greece being fine are the financial sector as a whole.”
In the case of AIG, Garnick notes there are some fundamental reasons to buy the stock. “They are finally selling off units at a significant premium.” In the last week, AIG has agreed to sell two of its units for about $50 billion.
However, Garnick cautions that until financial reform is worked out in Washington, many in the institutional investment community will avoid these stocks, which have become a playground for the day-traders.
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Posted by Yanira Farray on Mar 11 2010, With 0 Reads, Filed under Economy. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.
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