Chase Manhattan Corp. shares rose sharply Thursday as news that it is in talks to combine businesses with a U.K.-based investment bank and asset management group coincided with a series of positive earnings reports from U.S. investment firms.
Chase shares were up $6.9375, or 7.58%, to $98.50, after it acknowledged it is in talks with Robert Fleming Holdings Ltd., one of the last British-owned investment banks. Neither Chase nor Fleming gave details of their negotiations.
Investors were already snapping up shares of commercial banks with strong investment banking businesses. J.P Morgan & Co. was among other big gainers, rising $7.0625 or 5.47% to $136.125. Citigroup Inc. shares gained 3.0625, or 5.21%, to $61.8125.
Raphael Soifer, chairman of the strategic consulting firm Soifer Consulting LLC, said investors may have been reacting to a strong earnings report by Morgan Stanley Dean Witter & Co. Morgan Stanley's net income for the period rose to $1.54 billion, or $1.34 a share, from $1.04 billion, or 88 cents a share a year earlier.
According to Robert Becker, an analyst at Argus Research, the gains also "reflected expectations for solid first-quarter results based on earnings from some of major broker houses released earlier this week."
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