NEW YORK (AP) -- Shares of State Street hit their highest level in more than four years on Tuesday as investors continued to support a move to cut its staff and expenses. The custody bank's gains were helped by a rating and price target boost from an analyst, who cited the latest cost-cutting efforts.
THE SPARK: On Friday, State Street Corp. announced that it plans to cut 630 jobs, or about 2 percent of its worldwide workforce, as it continues to work on lowering expenses. The Boston company also reported fourth-quarter results that beat Wall Street's expectations, and shares rose nearly 6 percent.
State Street provides money-handling services to pension funds, mutual funds, retirement plans and other institutional investors, and also manages investments, including the "SPDRs" family of exchange-traded funds.
THE ANALYSIS: JPMorgan's Vivek Juneja upgraded State Street to "Neutral" from "Underweight" and increased its price target to $50.50 from $46.50.
In a client note, the analyst said that the custody bank's latest cost-cutting should result in an additional $90 million in annual savings by 2014.
Juneja said that State Street's capital ratios remain strong, and that it will probably increase dividends and buybacks this year.
SHARE ACTION: State Street's stock climbed $2.12, or 4 percent, to $55.48 in afternoon trading. The shares touched $55.73 earlier in the session, their highest point since October 2008.