Good news ahead for the banking industry?
Wells Fargo turned a profit in the first three months of 2009, but could also post record quarterly earnings with net income of $3 billion, according to an April 10 story in USA Today.
Investors naturally cheered, sparking a big rally in bank shares.
Wells Fargo jumped 32 percent to $19.61 per share, USA Today said, while other banks like Bank of America, which bounced 35 percent to $9.55, enjoyed similar gains.
Economists and investors hoped the run of good luck meant the system was finally stabilizing.
USA Today said Well Fargo’s results show that homeowners took advantage of low rates. “The bank saw $100 billion in new mortgages in the quarter, with more than 450,000 people purchasing or refinancing homes. Mortgage applications rose 64% from the fourth quarter of 2008 to $190 billion,” the paper said.
Analysts were buoyed, but cautioned against jumping to too much of a rosy conclusion, citing that the results of the government-ordered “stress tests” on bank assets had not yet been revealed.
Ben Wallace, an analyst at Grimes & Co., told the paper: “It’s a good start.”
This article was submitted by Kathleen O’Connor, a contributing writer for Biz2Credit. Biz2Credit is a small business marketplace that provides entrepreneurs with the latest industry news and financial advice. Send all questions to firstname.lastname@example.org.
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