Has Risk-Appetite Returned? Stocks Surge Most Since Nov.
U.S. stocks surged by the most since late November after Citigroup’s Chief Executive Officer Vikram Pandit stated that his bank would be having the best quarter since 2007. JPMorgan and Bank of America basked in the glory, rising 22.64% and 27.73%. Comments by Senator Barney Frank of Massachusetts helped sustain the rally. During questioning of Federal Reserve Chairman Ben Bernanke, he stated that the “uptick rule” would be reinstated after having been removed in July 2007. The uptick rule requires that a stock rise in price before it can be sold short. Reinstating this rule would make the practice of borrowing and selling a stock, (short-selling) in order to profit from the fall in share prices, less accessible. With that, investors may feel a bit relieved over the future prospect of falling stock prices.