Bank of America

Shares in Bank of America closed almost 10% higher overnight after Warren Buffett pledged to take a $5bn stake in the firm, which may have already netted him a $1.3bn profit.

Billionaire investor Warren Buffett has agreed a deal which will see his firm Berkshire Hathaway invest $5bn in Bank of America.

Hedge fund manager John Paulson bought into News Corporation ahead of the phone hacking scandal during a quarter when he also slashed major bank stakes.

FINANCIALS FUNDS: WORTH THE RISK?

Bank of America's share price fell by 20% as US financials were routed in Monday trading over growth fears and S&P's downgrade of the US credit rating.

Moody's said it has put Citigroup, Bank of America, and Wells Fargo on review for possible credit ratings downgrades as the US government cuts support for future bailouts.

Expectations the Bank of England and European Central Bank will raise interest rates in the second quarter of 2011 have risen dramatically, a new survey of fund managers shows.

Bank shares in the US dived overnight after a group of investors united to try force Bank of America to repurchase soured mortgages packaged into $47bn of bonds.

Bank of America could offload its 34% stake in the world's largest asset manager BlackRock.

Legg Mason's Mary Chris Gay has diversified the financials holdings in the $4.8bn (£3.2bn) Value trust she runs with Bill Miller after the fund's exposure to banks hit it hard last year.