This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

CIT Group: Financial Loser

Stocks in this article: C BAC CIT WFC XLF

NEW YORK ( TheStreet)-- CIT Group (CIT) shares fell 4.01% on more than triple their average volumes, making the company one of the biggest losers among financial stocks Monday.

Financial stocks continued to be driven by rising interest rate fears Monday in the wake of signals last week from Federal Reserve Chairman Ben Bernanke that the Federal Open Markets Committee will soon begin tapering its economic stimulus. While analysts see several reasons to view rising rates as a bullish sign for financial stocks, few investors wanted to stick their necks out amid a broad stock market selloff.

"CIT is one of the most widely held names among hedge funds and is liquid, which on a day such as today is a combination that can translate into large volumes to the downside. From a fundamental standpoint, however, CIT actually stands to benefit from higher interest rates," wrote BTIG analyst Mark Palmer, in a brief email exchange after Monday's close.

CIT shares had been beating the market since late last month when the Fed terminated a written agreement with the lender that reduced its flexibility regarding share buybacks or an increased dividend. With the lifting of that agreement, which had been in place since 2009, CIT is seen as more likely to sell itself to a bank. Nonetheless, Drexel Hamilton analyst David Hilder wrote in a research note earlier this month he believes any potential sale of CIT is unlikely near term. From May 29 until Wednesday, when the Fed began sending newly hawkish signals, CIT shares were up nearly 7% versus a flat S&P 500. Since that time, however, CIT shares are down 6.81% versus a 3.43% decline for the S&P.

Elsewhere in the financial sector Monday, popular exchange traded fund Financial Select Sector SPDR (XLF) fell 1.80% to $18.77. Contributing to the fund's decline were components Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC), down 3.07%, 3.05% and 2.83% respectively.

Sandler O'Neill strategist Robert Albertson says it is common for bank stocks to fall as interest rates start to rise over what he described on Bloomberg Television Monday morning as a "knee-jerk" response. Nonetheless, he says rising rates will ultimately prove "positive for wealth."

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs