Capital One, Discover, Synchony Stock Are Among Best Performers in Market Rally

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Among the best performers during Thursday’s stock market rally were the beaten down shares of three consumer financial companies— Capital One Financial, Discover Financial Services, and Synchrony Financial.

Synchrony stock (ticker: SYF) led the group, up 14% to $19.03. Discover stock (DFS) rose 11.4% to $41.71, while Capital One shares (COF) jumped 10.6%. By comparison, the PHLX/KBW Nasdaq Bank Index rose 8%, while the Dow was up 6.4%.

For all three, it was their highest close since March 13. Discover shares have gained every day this week, up 65% over the period. That’s its best four-day stretch on record, according to Dow Jones Market Data. The others are on a three-day streak.

The Senate passed a $2 trillion stimulus bill Wednesday night, giving the broader market a much-needed boost on Thursday. The gains continued even after the Labor Department said that 3.28 million Americans filed for unemployment last week. The stimulus bill, if approved by Congress, would temporarily improve unemployment benefits and expand them to include freelancers and gig economy workers.

And much of the relief for businesses comes in the form of loans, meaning banks will have a hand in the action. For the credit card companies, specifically, the relief means consumers will have more cash to make payments.

Just because Synchrony, Discover, and Capital One had a big day, doesn’t mean they are out of the woods. All three trail the PHLX/KBW Bank Index in 2020, which is down 38% year to date. At current levels, Capital One is still on pace for its worst month since January 2009. March would be both Discover’s and Synchrony’s worst month on record.

Write to Connor Smith at connor.smith@barrons.com