Shares of Countrywide Financial Corp. rallied about 10% on Friday after the Federal Reserve cut a key interest rate early in the day.Meanwhile, a new analyst report on Countrywide by Morgan Stanley predicts that the nation's largest lender likely "will work out a cash flow positive plan in this challenging environment by migrating mortgage production" to its thrift unit. On Wednesday a Merrill Lynch report called Countrywide's stock a "sell," suggesting that the company could file for bankruptcy protection if the secondary market's liquidity crisis worsens. On Friday morning the Fed slashed the discount rate (the rate it charges banks for loans) to 5.75% from 6.25%, making cheaper financing available to any depository that needs cash. (See story above.)
Countrywide Shares Rally After Fed Rate Cut
Published August 17, 2007, 2:00 p.m. EDT
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