Shares of BankBoston Corp. shot up $2.9375 Monday, to $81.6875, after the company disclosed it had lost only $20 million on its securities and foreign exchange trading in October.
The news fed growing sentiment that bank stocks have been oversold in reaction to the recent tumult in Asia.
BankBoston was among the issues most in demand in a general market rally. Trading in its stock was halted for 30 minutes after the opening bell to meet the rush of buy orders.
The stock jumped $4 in early morning trading, buoyed by a spate of upgrades from analysts and an article in Barron's magazine that labeled the institution a good candidate to be taken over by a company interested in foreign expansion.
"Some of the convulsions of the past couple of weeks are fading," said Moshe A. Orenbuch, banking analyst with Sanford C. Bernstein & Co. "What's going on overseas is not so closely linked to how banks are doing overall."
Other gainers included BankAmerica Corp., up $3.625, to $74.375; Chase Manhattan Corp. up $4.6875, to $108.3125; Wells Fargo & Co., up $5.6875, to $288; and Citicorp up $7.25, to $123.50.
Among regional banks, First Chicago NBD Corp. rose $1.8125, to $71.50; PNC Bank Corp. rose $1.3125, to $49.
The Standard & Poor's bank index rose 3.32%.
BankBoston attributed the $20 million loss to volatility in Asian and Latin American markets. But the banking company said it also took advantage of the upheaval and "partially offset" the losses through gains in fee income and net interest revenue, according to its quarterly filing with securities regulators.
Analysts described the hit as modest, especially in contrast to last week's disclosure that Chase Manhattan Corp. suffered $160 million of losses from similar trading operations. Chase has since regained some ground and was raised on Monday to a "buy" from a "hold" recommendation by analyst Lawrence Cohn of Ryan, Beck & Co.
BankBoston's ratings were raised or reiterated by PaineWebber, Smith Barney, and UBS Securities.
The banking company "has demonstrated an ability to manage through difficult economic environments in Latin American," including the Mexican peso devaluation in 1995, said Henry Dickson of Smith Barney.
"While it may be difficult to hit its previous trading numbers, there are other sources of market-related activity and businesses to possibly compensate for that loss of business," Mr. Dixon said.