Bank Stocks Rise with Market; Morgan, Chase Strong Gainers

Bank stocks jumped with broader markets on Monday as investors welcomed definitive weekend developments on a pair of major economic and political issues.

"The market is relieved" about the end of U.S. and British air strikes on Iraq and that the House of Representatives has wrapped up its role in impeachment proceedings, said Joseph V. Battipaglia, chairman of investment policy at Gruntal & Co.

"Everyone was wondering about the bombing and what kind of rebuke the President might receive," Mr. Battipaglia said. "In essence it's been tied up into a clean, neat package."

Investors were also reacting with relief because the economy remains strong, according to the latest available indicators. And they remain comfortable with the top economic policymakers in Washington, Treasury Secretary Robert Rubin and Federal Reserve chairman Alan Green-span.

Gainers included Chase Manhattan Corp. up $2.75, to $72.25; and J.P. Morgan & Co., up $2.75, to $103.25.

Mr. Battipaglia also cited as opportunities the "tortured few" whose fundamentals are solid but that have been beaten down over the past few weeks.

The group includes Citigroup, up $1.3125, to $51.1875; First Union Corp., which lost 25 cents, to $62.9375; and Wells Fargo & Co., down 43.75 cents, to $38.25.

"There are pockets of strength and quality franchises," in the regional group as well, said Eric Rothmann, banking industry analyst at Stephens Inc., Little Rock.

He likes Amsouth Bancorp., which was unchanged at $43.4375; Firstar Corp., up $1.5625, to $78.875; Regions Financial Corp., down 93.75 cents, to $38.678; and South Trust, up 25 cents, to $35.875.

For the day, the Standard & Poor's bank index added 1.23%, and the Dow Jones industrial average was up 0.96%. The Nasdaq bank index gained 0.24%, and the S&P 500 added 1.25%.

Shares of Colonial BancGroup Inc. edged up 31.25 cents, to $11.5625, after the company said it would take a $32 million one-time charge and write down the value of its mortgage servicing portfolio by $30 million to account for early repayments of mortgage loans.

Analysts said the writedown and one-time charge will result in an 11- cent loss per share for the fourth quarter.

The Montgomery, Ala., banking company said the charge would help with restructuring, acquisitions, and other one-time events.

Shares of Colonial "should continue to be under pressure for a time," Mr. Rothmann said.

"We could see strength in the stock price next year as long as earnings improve," Mr. Rothmann said.

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