Stock Watch: Big Players Teaming Up New Online Investment Bank

The momentum surrounding online brokers continued on Monday, as three major players announced a deal to create a new online investment bank. Charles Schwab (NYSE: SCH), TD Waterhouse (Nasdaq: TWE) and Ameritrade (Nasdaq: AMTD) will launch the new entity, which will underwrite and distribute new equity offerings. This deal is a good sign for individual investors, because it means that more small investors should be able to get shares of initial public offerings at the offering price.

Investors liked Monday’s news. Shares of Charles Schwab gained 3/8 to 43-1/4, TD Waterhouse climbed 2 to 19-3/8 and Ameritrade soared 4-1/2 to 26-7/16. What is also notable is that investors do not seem to be too concerned about the new investment bank being a threat to existing online investment banks like Wit Capital (Nasdaq: WITC) and E*Offering. Shares of Wit Capital climbed 1-5/16 to 23-9/16 on Monday while shares of E*TRADE (Nasdaq: EGRP), which has a stake in E*Offering, climbed 1-3/8 to 38-1/8. It looks like there is a lot of room for growth in the nascent market of online investment banking.

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