Bank of America's Countrywide Purchase Boosts Stocks |
| Bloomberg - Aug 23, 2007 |
Bank of America Corp. bought $2 billion of preferred stock from Countrywide Financial Corp., erasing concern the nation's largest mortgage lender will go bankrupt and boosting investor confidence in stocks worldwide.
``Countrywide is no longer on the endangered company list,'' Punk Ziegel & Co. analyst Dick Bove wrote in a note to clients yesterday. ``This investment makes sense for both companies. Bank of America will now presumably be the preferred lender to Countrywide.''
The cash infusion gives Countrywide the funds it needs to keep making loans after the highest defaults on U.S. subprime home loans in 10 years drove up the cost of credit. That forced central banks to pump more than $400 billion in emergency funds into the money markets. Stocks in Europe and Asia advanced and U.S. stock futures climbed, while government bonds fell today.
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- Posted: 2007-08-23 09:58:08
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