The shares of private-prison providers jumped on Friday after the Justice Department signaled its support for their use by the federal government.
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Prison stocks are jumping after the Justice Department reverted a plan to reduce their use (GEO, CXW)
Prison stocks have been on a tear since President Donald Trump won the election.
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Last August, Sally Yates, the former deputy attorney general, directed the Bureau of Prisons to withdraw or decline contracts for private-prison operators at expiry. She said the facilities compared poorly to federally-run prisons.
But in a memo issued on Thursday, Attorney General Jeff Sessions said the directive
CoreCivic known as Corrections Corporation of America), the largest , rallied 3%. Geo Group gained as much as 3.6% to a record high near noon in New York.
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Prison stocks have been on a tear since President Donald Trump won the election, as investors anticipated that the new administration would rescind Yates' directive. CoreCivic's stock crashed 50% right after the initial memo was released last August.
CoreCivic has surged 149% since the election, while Geo Group has risen 105%.
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