(Bloomberg) — Genworth Financial Inc. and Radian Group Inc. rallied in New York trading after posting profits from insuring U.S. mortgages.
Genworth jumped 4.6 percent to $15.20 at 9:38 a.m., the biggest gain in the Standard & Poor’s 500 Index. Radian climbed 4 percent to $14.90.
Genworth, which also offers life insurance and long-term care coverage, had a $6 million operating profit at its U.S. mortgage insurer, compared with a loss a year earlier. Philadelphia-based Radian today reported net income of $36.4 million, after a $177.3 million loss in the last three months of 2012.
“We expect significantly higher earnings for U.S. MI in 2014 than in 2013 as the 2005-to-2008 blocks continue to burn out,” Genworth Chief Executive Officer Tom McInerney said on a conference call today.
Mortgage insurers cover losses when homeowners default and foreclosures fail to recoup costs. The firms are rebounding after posting years of losses when home prices tumbled in the financial crisis.
Shares of Radian and Richmond, Va.-based Genworth more than doubled last year as investors bet on a housing recovery. Milwaukee-based MGIC Investment Corp. more than tripled in 2013.
The improving real estate market has drawn fresh competitors into the business. NMI Holdings Inc., the mortgage insurer backed by Kyle Bass and Carlyle Group LP, held an initial public offering last year, as did Essent Group Ltd., which counts JPMorgan Chase & Co. and Goldman Sachs Group Inc. among its investors.