Why Ally Financial Stock Is Soaring Higher Today
Shares of Ally Financial (NYSE: ALLY) have lost nearly half of their value over the past year as investors worried its automotive-heavy loan portfolio would be hard hit by macroeconomic trends. On Friday, the company reported results that suggest it is holding up a lot better than some had expected, and its share price surged. As of 10:45 a.m. ET, the stock was up by about 15.6%.
Automotive lending runs deep in the roots of Ally Financial. The bank was founded a century ago as the lending arm of General Motors. The automaker sold a majority stake in the business, then known as GMAC, in 2006, and the two were fully separated during the financial crisis, with GMAC adopting the Ally name in 2009.
But auto loans still make up a significant portion of Ally's loan book. That became a cause for investor concern in 2022 as rising interest rates and falling used car values increased the level of risk on Ally's balance sheet.
Source Fool.com
