Financial stocks have definitely turned some kind of psychological corner as evidenced by today’s move in Morgan Stanley (MS). After posting a loss that was much larger than consensus, the stock is currently trading up over 5% with about 20 minutes left in the trading day. The stock had been off about 6% pre-market, so it’s a big turnaround, and evidence that passion to sell financial shares on any news has clearly passed. Even Citigroup (C) has settled around $8.00/share and now only moves moderately.
Another factor possibly helping financials: Hank Paulson’s executive proclamation to Maria Bartiromo that there would be no more financial failures. We’re not sure if that was a prediction or an order, but between that and the age of free money, bank investors might be sleeping a bit easier — at least for a while.
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