Stocks surge as profits at Wells Fargo jump

[PBS Poll-435]

Stocks surge as profits at Wells Fargo jump

By STEPHEN BERNARD and TIM PARADIS – 15 minutes ago

NEW YORK (AP) — Stocks bounded higher early Thursday after banking giant Wells Fargo & Co. issued a surprise profit announcement that was far above analysts' estimates.

Investors have been grasping at any sign of improvement in the crippled banking sector, and Wells Fargo's report early Thursday that it expects record first-quarter earnings of $3 billion provided an encouraging sign that a deep freeze in bank lending may finally be beginning to thaw.

"The fact that Wells Fargo can have record profits despite the troubles facing the banking system tells you something," said Rick Campagna, chief investment officer at 300 North Capital in Pasadena, Calif. "It's very good news."

The market's surge was led by banking shares including Wells Fargo, which jumped 19 percent. The early profit report helped allay some of the market's worries about banks, which were fed this week by worrisome forecasts from key analysts about problems banks still face such as loans that have gone bad. Major banks begin reporting first-quarter profits next week.

[marketcrazy1]

1. I am sure the new accounting rules had to help

I will be eager to see the actual income statement... so I can go over it line by line.

[bluestateguy]

2. Oh good, then they can pay back their TARP money

nt

[PBS Poll-435]

3. As soon as they are allowed to.

The Treasury Department is being kind-of strict about that kind of thing....

[lpbk2713]

4. Will someone let me know when OxyRush, Hannity and all the other RW Media Hatemongers ...

... do a swan dive off the nearest skyscraper? Doesn't look to me like Obama is FAILING any time soon.

Most likely though, they will say any upswing is the result of "sound Bush era economic strategy".

Or even from the result of RayGunomics.

:rofl: :rofl:

[DJ13]

5. The Wells CFO admitted on CNBC this AM that the earnings

were due to the inclusion of Wachovia's balance sheet for the first time.

It sounds like the bank analysts deliberately ignored the Wachovia inclusion in their earnings estimates to paint Wells as doing better than expected.

[Statistical]

8. No. Wells Fargo did bad but better than expected.

It had $3B profit in Q1 2009.
WFC + Wachovia had $6B profit in Q1 2008.

Due to about $2.8B in write downs analyst expected the combined company to earn only $1.8B.

Write downs were a lot less than expected (not all banks took equal risk) and so WFC+Wachovia earned $3B.

Now remember $3B is HALF compared to last year. Thats bad

But for last 3 months analyst have been predicting it would only be $1.8B
Stock traded down on that grim outlook. Turns out it was over grim so stock pops today.

Going forward once WFC gets rid of Wachovia brand, rebrands existing locations, and closes redundant locations it will be THE bank going forward.

[jmg257]

6. How does Wells Fargo make 3 BILLION dollars in 3 months? (and can I get some of that?)

[Kindigger]

7. Screwing disabled people

I talked to a friend living in another state, last weekend. He gets his disability check on the 3rd, but had an agreement with 'the bank' that he could post-date his checks for bills, and mail them before the 3rd. If they got back to the bank before his check was deposited, they were supposed to hold them.

So without warning, on April 2nd, they put through three checks, and charged his meager account $39 for each check.

He called them, and they said :shrug: