UPDATE: Citigroup Raises Target on American Capital to $29

Citigroup reiterates its Neutral rating on American Capital AGNC and raises its price target by $3 to $29 a share as yields are expected to remain high on Fed's holding of low rates. Citigroup says, "Mgt noted a Q4 environment dominated by uncertainty in Europe and concern around heightened prepayments. While we acknowledge increased refinancing activity remains a risk, the overriding theme, in our view, is the Fed's announcement to keep base interest rates at or near zero through 2014. Given the Fed's accommodative stance, we expect AGNC and other agency REITs to continue to produce an attractive yield." AGNC closed at $29.93 a share on Tuesday.