Wall St seen higher on Countrywide-led confidence Thu Aug 23, 2007 9:04AM EDT
By Kristina Cooke
NEW YORK, Aug 23 (Reuters) - U.S. stocks were heading for a higher open on Thursday on news that Bank of America (BAC.N: Quote, Profile, Research) was pumping $2 billion into troubled U.S. mortgage lender Countrywide (CFC.N: Quote, Profile, Research), which lifted investors' confidence.
Bank of America's investment to help Countrywide Financial Corp shore up its finances boosted shares of financial companies and mortgage lenders, which have borne the brunt of recent credit market turmoil. Countrywide's shares soared 14 percent before the opening bell.
Investors were moving funds into riskier assets like equities out of ultra-safe government paper on growing confidence the credit troubles sparked by a crisis in the U.S. subprime mortgage market may be easing. For more see [US/].
"There is a continuing recovery in many of the financial stocks, as apparently the worst of the crisis in credit has passed," said Peter Jankovskis, chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
"That Bank of America was prepared to step in and provide capital to Countrywide shows there is faith in the financial community that it will recover and indicates that the Fed's plan is working."
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