The U.S. government has already retrieved about $4 billion in profits from 8 of the biggest banks that have fully repaid their obligations from the $700 billion Troubled Asset Relief Program (TARP). The government has recorded profits of about $1.4 billion from its investment in Goldman Sachs Group Inc. (GS), $1.3 billion from Morgan Stanley (MS) and $414 million from American Express Company (AXP). Furthermore, the government has also reaped profits in the range of $100 million to $334 million from its investments in each of the following five banks: Northern Trust Corporation (NTRS), The Bank of New York Mellon Corporation (BK), State Street Corp. (STT), US Bancorp (USB) and BB&T Corp. (BBT). It also collected about $35 million in profits from 14 smaller banks that have paid back their loans. TARP was introduced in October 2008 to ...

Northern Trust Corp. (NTRS) on Wednesday declared that it has completed the final step to free itself from the government bailout program. The Chicago-based custody bank paid $87 million to repurchase stock warrants issued to the federal government as part of the Troubled Asset Relief Program (TARP).

With this repurchase, Northern Trust has paid a total of nearly $1.71 billion to the Treasury under TARP. This includes repurchase of preferred stock issued to the government and preferred dividends. According to the bank, the total payments represent a 14% annualized return on investment to the US taxpayers.

The $700 billion bailout program was launched by the federal government to help revive deteriorating credit markets during the height of the financial crisis. The government provided capital to institutions in exchange of preferred stock and warrants to purchase common shares.

Most banks still have short-term debt guaranteed by the government. However,

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[Editor's Note: After more than a year of chaos and controversy, some of the leading U.S. banks saw their stock prices soar during the second quarter. As part of its mid-year forecast series, Money Morning examines the outlook for U.S. banks for the rest of this year. To see earlier stories from our mid-year forecast series, please click here.] By Martin Hutchinson Contributing Editor Money Morning

Can U.S. bank stocks continue their winning streak?

In February, I analyzed the top 12 U.S. banks to determine whether they really needed $1.5 trillion in taxpayer-provided bailout capital. I concluded that only a few of those banks seemed to be in any danger of collapse, and actually recommended several.

Policymakers and the market later came to agree with me: The Standard & Poor’s 500 Financial Index has more than doubled from its March low and several bank stocks have posted triple-digit …

Regions Financial (RF) may face charges from the U.S. Securities and Exchange Commission (SEC) for possible violation of the federal securities laws associated with mutual funds that were formerly managed by Morgan Asset Management. Regions Financial disclosed in an SEC filing yesterday that Morgan Keegan & Company, Inc., a wholly owned subsidiary of Regions Financial, Morgan Asset Management, Inc. and three employees have each received a "Wells" notice from the Atlanta Regional Office of the SEC. A Wells notice is neither a formal allegation nor a discovery of wrongdoing. The company receiving a Wells notice will have a chance to justify itself before being condemned. Regulators are investigating the roles of the fund managers in the credit crisis. Last month, State Street Corp. (STT) had disclosed that it had received a Wells notice related to certain fixed income strategies. The strategies were finally backed by subprime ...

On July 15, U.S. Bancorp (USB) announced that it paid $139 million to buyback the stock warrants held by the U.S. Treasury Department. As part of the company’s participation in the U.S. Treasury’s Capital Purchase Program, the 10-year warrants were issued in November 2008. U.S. Bancorp entitled the Treasury to purchase 32.7 million common shares at an exercise price of $30.29 per share.

Last Friday, State Street Corp. (STT) said that it paid $60 million to repurchase its own warrants. U.S. Bancorp and State Street are among the 10 major financial services companies to be permitted by the federal regulators last month to repay the bailout money.

In May this year, the Federal Reserve conducted a Stress Test and concluded that U.S. Bancorp did not need any additional capital buffer. The decision came after estimating the adequacy of the company’s capital base under a hypothetical two-year scenario, considering adverse economic

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U.S. stock futures pointed to a modestly higher open on Monday as investors looked to new data later in the holiday-shortened week for clues over the direction of the recession-hit economy.

U.S. stocks have run up as much as 40 percent since early March but have drifted recently as investors looked for signs to justify earlier optimism over an economic economy that partly drove the rally.

“The focus will be on the economic data in this abbreviated week,” said Peter Cardillo, chief market economist at Avalon Partner in New York. “What we are going to see is a market that is going to respond to the economic data, numbers that should continue to indicate improvement ”

The main focus later this week will be the June jobs report set for Thursday instead of Friday, when U.S. markets will be closed due to the U.S. Independence Day holiday.

Other key economic data will include the

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In a move that could shake up the clubby business of exchange-traded funds, bond giant Pacific Investment Management Co. is poised to launch its first ETF early this week.

The move by Pimco, a unit of Allianz SE co-founded by bond guru Bill Gross, marks the first time in years such a high-profile mutual-fund company has tried to muscle its way into the ETF business, long dominated by a handful of large-but-lesser-known asset managers that specialize in indexing, such as Barclays PLC and State Street Corp.

ETFs, baskets of stocks or bonds that trade on an exchange, have been rapidly gaining popularity with investors, and took in tens of billions of dollars in 2008. But many big-name mutual-fund companies have shrugged off ETFs because these offerings were traditionally just index funds with low management fees, which ensured that profit margins were measly.

Pimco’s

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In a move that could shake up the clubby exchange-traded fund business, bond giant Pacific Investment Management Co. is poised to launch its first ETF early next week.

The move by Pimco, co-founded by bond guru Bill Gross, marks the first time in years such a high-profile mutual fund company has tried to muscle its way into the ETF business, long dominated by a handful of large-but-lesser-known asset managers that specialize in indexing, such as Barclays PLC (BCS) and State Street Corp. (STT).

ETFs, baskets of stocks or bonds that trade on an exchange, have been rapidly gaining popularity with investors, taking in tens of billions of dollars in 2008 as similar amounts fled conventional funds.

But many big-name mutual fund companies have shrugged off ETFs because they were traditionally all index funds, making it hard to distinguish new offerings and keeping

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China Ramps Up Oil Refining; Lowe’s Tops Forecasts; Toshiba Raising $3 Billion in Stock Sale; AIG Fast-Tracking Asian Subsidiary IPO; Obama Sets First Pollution Limits on Cars; Homebuilder Confidence Highest in 8 Months; State Street Sells $1.5 Billion in Stock to Repay TARP Funds; Oil Spikes on Africa Violence, U.S. Refinery Fire

China will increase its annual oil refining volume by 18% over the next two years to meet expected long-term demand. China’s State Council also said that it would boost stockpiles and encourage petro companies to merge operations, Bloomberg reported. Lowe’s Cos. Inc. (NYSE: LOW) reported an analyst-beating quarterly profit and raised its full-year forecast. The No. 2 home improvement retailer cited improving ...

The week started off on a strong note as the major indexes were all up significantly, as the Dow closed up 2.85%.  The NASDAQ and the S&P also had strong days, finishing up 3.11% and 3.04% respectively.  Gold and oil headed in different directions today, as oil was up settling at $59.03, while oil declined to $921.70.  The 10-year treasury saw prices rise finishing with a yield of 3.237%. 

State Street Corp. [STT: 41.79, +3.28 (+8.52%)] announced today that it has already started selling $1.5 billion worth of common stock and in an additional offering it will sell senior notes, not backed by the FDIC’s Temporary Liquidity Guarantee Program.  Both of these actions were taken as the company plans to use the proceeds to buy back preferred stock and warrants from the Treasury Department.  The buyback has not been approved by the government, but many feel that given the fact that

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