Top Financial Gappers on Discount Rate Cut (GS, BSC, LEND, ETFC, TMA, NLY, WM, WFC, CFC, MBI, PMI)

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These intra-meeting cuts like the 50-basis point discount rate cut this morning, even if this one is the discount rate rather than the funds rate, do act as stabilizers and you are seeing it in the financials directly and in most of the other sectors.  We hate to look a gift horse in the mouth, but when these rate cuts occur pre-market the actually tend to not be as good for traders as they are when the FED does this during trading hours.  Some of these gaps may hold, but it won’t be a huge shock if some of these give a little back after these huge gap ups this morning.  The fact that today is stock options expiration date may also create some different actions.  Needless to say, there is a massive amount of short covering going on and this may have staved off another horrible day in the markets after Asia opened and slid massively.

This is just a small sample of the gappers, but here goes:

Goldman Sachs (GS) +3.78 at $176.27.

Countrywide (CFC) +18% at $22.40.

Accredited Home Lenders (LEND) +15% at $7.58.

Thornburg Mortgage (TMA) +27% at $15.85.

Annaly Capital Mgmt. (NLY) +6.5% at $14.97.

Washington Mutual (WM) +9% at $38.75.

Wells Fargo (WFC) +4.8% at $37.00.

E*Trade (ETFC) +14% at $15.50.

Bear Stearns (BSC) +7.4% at $125.00.

MBIA (MBI) +6.5% at $60.00.

PMI Group (PMI) +16% at $33.00.

Jon C. Ogg
August 17, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he is the publisher of the 24/7 Wall St. Special Situation Investing Newsletter and does not own securities in the companies he covers.