E*TRADE (ET) Higher on Takeover Speculation Following Charles Schwab's Large Asset Sale

Shares of E*TRADE Financial Corp. (NYSE: ET) are higher for the second straight session as takeover rumors surround the name following yesterday's news that Charles Schwab (Nasdaq: SCHW) sold its U.S. Trust unit to Bank of America for $3.3 billion.

Speculation now centers around what Charles Schwab will do with the funds. According to published reports in the Financial Times, Fox-Pitt Kelton analyst David Trone suggested E*TRADE could be a good fit for Schwab. A buyback could be another alternative.

Shares of E*TRADE are up 1.9% today after rising 4.2% Monday.

Others stocks in the online brokerage sector that could see increased takeover speculation include optionsXpress Holdings Inc. (Nasdaq: OXPS), TD AMERITRADE Holding Corporation (Nasdaq: AMTD) and TradeStation Group Inc. (Nasdaq: TRAD).

Reports Bank of America (BAC) to Acquire Charles Schwab's U.S. Trust Unit for $3.3B

According to reports from the Wall Street Journal, Bank of America (NYSE: BAC) plans to purchase U.S. Trust, the private-banking arm of Charles Schwab Corp (Nasdaq: SCHW), for $3.3 billion. According to the paper, the purchase would create a new leader in lucrative business of managing rich people's money, which has long been dominated by JP Morgan (NYSE: JPM) and Citigroup (NYSE: C).