Home equity stocks have rallied in the past week, thanks to a rate rise and rumor that FirstPlus Financial Group was in merger talks with a subprime lender controlled by financier Leon Black.

Many of these stocks doubled in price after hitting 52-week lows Oct. 7. United Companies Financial Corp. of Baton Rouge, La., rose 58% from its low of $3.4375 a share, to trade midday Tuesday at $5.375. Amresco Inc. of Dallas rose 165% during the same period, to $5.4375.

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