Local Companies Gain on Rate Cut

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Shares in local homebuilders, lenders and banks moved up Tuesday after the Federal Reserve moved to push-start the economy with a surprise interest-rate cut.


Shares in Los Angeles-based KB Home shot up 5 percent to $19.44 while shares in Calabasas-based Ryland Group Corp. added 2.6 percent to $26.51. Shares in KB have lost as much as 29 percent this year, while shares in Ryland had shed as much as 25 percent.


Local lenders and banks also gained, with Pasadena-based lender IndyMac Bancorp adding 2.9 percent to $4.55 and Santa Monica-based FirstFed Financial Corp. adding 2.5 percent to $31.11.


Beleaguered lender Countrywide Financial Corp. also added 6.7 percent to $5.29, thanks in part to Bank of America Corp. quelling rumors that its $4 billion buyout deal for Countrywide was on the rocks.


The uptick in homebuilders comes as the Federal Reserve cut the federal funds rate the rate which banks lend to each other to 3.5 percent from 4.25 percent. A cut in this rate, the Fed hopes, will spur business by making it cheaper for banks to borrow money.

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