Last week at this time, I was writing about how Citigroup (NYSE: C) and the rest of the big-four banks were tanking for no apparent reason. This week, I'm happy to report that Citi and its peers are decidedly not tanking. In fact, banks appear to be leading an overall market rally. Here's what we know.
The exact opposite of last week
First, let's have a quick look at exactly where Citi, its peers, and the markets are about midway through the trading day:
- Citi is up a big 2.43%.
- Bank of America is up 0.65%.
- JPMorgan Chase is up 1.36%.
- And Wells Fargo is up 0.92%.
The markets are all in the green, too, with the Dow Jones Industrial Average up 0.86%, the S&P 500 up 1.08%, and the Nasdaq Composite up 1.68%.
The Facebook effect
Two days ago, The Wall Street Journal broke the news that Citi plans to file suit against Nasdaq OMX Group for its botched handling of last May's Facebook initial public offering, and Citi's share price has been on the rise ever since.
There's no word yet on how much money the bank will ask for, but the Journal is reporting that securities firms as a group lost around $550 million total on the deal. Swiss banking giant UBS lost $356 million alone, which leaves less than $200 million for Citi and its cohorts to split.
Based on this, we know that whatever the superbank eventually claims in the filing won't be a game-changing amount of money. But investors -- like myself -- are probably just happy to see that the sometimes languid and unfocused bank is stepping up to try to right a wrong and recover monies it feels are justly due.
Speaking of game changers, thank you to CEO Michael Corbat for going to bat for Citi's bottom line and for investors.
Of course, in addition to the Facebook news, Citi is also up likely just because the markets are up. The stock market, as we know, moves because of human psychology as much as for any other reason. There's a reason we have terms like "vicious cycle," as well as its flip side, "virtuous circle."
But Foolish investors like yourself know you're in the stock market for long term, and you know you don't need to check on your share prices everyday. In the short term, the markets may move up and down, but over weeks, months, and years, so long as the companies you're invested in have strong fundamentals, you know your money is in the right place.