Corporate wheeling and dealing is boosting stocks and exchange traded funds (ETFs) today, particularly in the financial sector.

Washington Mutual Inc. (WM) could get a $5 billion investment from private equity firms, reports Tim Paradis for the Associated Press. The company has lost big in the subprime mortgage mess, and it’s talking with a buyout shop and other investors about selling a stake in itself in exchange for cash.

Washington Mutual isn’t a major holding in the financial ETFs we track, but the deal talks are being seen as a positive sign that investors are optimistic about recovery.

A strategist cautions that volatility isn’t exactly over – it’s earnings season, and investor anxiety could mount if the banks reveal bigger losses than expected.

  • Regional Bank HOLDRs (RKH), up 2% midday
  • Financial Select Sector SPDR (XLF), up 1.7% midday
  • iShares Dow Jones US Financial Services (IYG), up 2.3% midday


The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.