Wachovia rebound is puzzling

Earlier today I wrote about Wachovia’s second quarter earnings, or lack thereof.  The company lost a greater than expected $8.9 billion and announced drastic cuts to employees and dividends.

So why on earth did the stock close up over 27 percent today???

Analysts had a lot to say…one issued a price target of $30 on the stock saying, in a nutshell, that today’s price does not accurately represent Wachovia’s long term earnings power.  Another said that today’s earnings mark “the bottom.”  Another praised Wachovia for opting not to raise capital by issuing new stock.

Frankly, I am puzzled.  Even if the bottom has been reached, does any of the news released after the earnings report justify a 27 percent increase?  This is the type of increase I would expect to see after an M&A announcement NOT a $9 billion loss!