Trader Talk

Financials Moving Markets

Three big financial stocks are the top volume movers this morning--Washington Mutual, UBS, and Citigroup.

Washington Mutual up 16 percent pre-open on a Journal story that private equity firm TPG and others may invest $5 b in the company, which would provide it with much-needed capital. That's the kind of confidence-building gesture that helps convince investors we are closer to the bottom, and is the primary catalyst for the 11 point rally in the S&P 500 this morning.

Also helping the banks: Merrill is upgrading UBS . Separately, UBS says it will respond to activist shareholders Olivant Advisors "in due course." Olivant owns an 0.7 percent stake in UBS and recently called for a restructuring of the company. Calls for an outright breakup have been getting louder recently.

UBS up 5 percent pre-open, but many financials are up 2 to 4 percent.

Citigroup has hinted they may start unloading nonessential assets, and they have started today with the sale of Diners Club International operations to Discover, for $165 million. Citi up 4 percent.

In the endless merger dept: the FT reports that Delta and Northwest are once again revving up their merger discussions, despite the fact that the pilots could not even agree on the seniority levels of a merged company. This time, the two companies may take a run at each other without the pilot's approval.

What's up with China? Shanghai up another 4 percent after similar gains on Friday, Hong Kong has been bouncing for the past two weeks. Maybe it's the commodity "reflation" play again--gold, copper, oil all have been rallying.

Questions?  Comments?