BP's (BP) stock rallied after the energy giant agreed to put $20 billion into an escrow account to pay for clean-up and damages caused by the Gulf oil spill. BP will also set up a $100 million fund for unemployed oil rig workers -- and it has announced that it's suspending dividend payments for the remainder of the year.
Shares in BP jumped as high as $33 on the news before closing at $31.88, up 1.5%, or 48 cents.
The deal struck among President Barack Obama, BP Chairman Carl-Henric Svanberg and BP CEO Tony Hayward at a meeting Wednesday comes amid heavy criticism of the three executives' handling of the Gulf oil crisis -- and worse. Svanberg took the opportunity to say he's sorry: "I would like to take this opportunity to apologize to the American people on behalf of all the employees in BP, many of whom are living on the Gulf coast."
The agreement lifts at least some of the uncertainty surrounding BP, which helps account for the relief rally Wednesday. Additionally, investors perhaps took solace in the fact that BP generates gushers of cash -- or about $20 billion a year above and beyond capital expenditures, according to Citigroup (C) Citi Investment Research.
While it's obvious that BP is still facing plenty of financial pain, at least some major questions have been answered -- for now.
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