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Commerce Bancshares: Financial Winner

NEW YORK ( TheStreet) -- Commerce Bancshares (CBSH - Get Report) of Kansas City, Mo., was the winner among large U.S. banks on Wednesday, with shares rising 1.3% to close at $46.05.

The Dow Jones Industrial Average (^DJI) rose 0.8%, and S&P 500 (SPX.X) was up 0.4%, heading into the expected initial offering of Twitter, which is expected to be priced late Wednesday, with trading beginning Thursday on the New York Stock Exchange (NYX).

The NASDAQ Composite (^IXIC) was down 0.2%, dragged down by Tesla (TSLA), which sank 14.5% to $151.16, even though the electric manufacturer's third-quarter earnings beat the consensus estimate among analysts polled by Thomson Reuters. Tesla CEO Elon Musk said supply constraints were holding back production. The market can be quite fickle, especially for a stock that trades for 95 times the consensus 2015 earnings estimate of $1.59 a share.

The KBW Bank Index (BKX) rose 0.3 to close at 64.46, with all but four index components ending with gains.

Investors were looking ahead to two key economic reports. The Bureau of Economic Analysis on Thursday is expected by economists to report estimated third-quarter annualized growth of 2% for the U.S. gross domestic product, declining from a growth rate of 2.5% the previous quarter.

Economists on average expect the U.S. unemployment rate for October to come in at 7.3% on Friday, increasing from 7.2% in September.

These expected "bad news" items are considered "good news" by investors in a bull market, since any sign of a slowing economic recovery only underlines expectations that the Federal Open Market Committee after its next meeting on Dec. 17-18 will once again delay the curtailment of bond purchases by the Federal Reserve.

As part of its "QE3" stimulus policy, the Federal Reserve has been purchasing a net $45 billion in long-term U.S. Treasury securities and $40 billion in long-term agency mortgage-backed securities each month since September 2012, in an effort to hold down long-term interest rates.


Shares of Commerce have returned 34% this year. The shares trade for 15.5 times the consensus 2014 earnings estimate of $2.97 a share.

Based on a quarterly payout of 22.5 cents, the shares have a dividend yield of 1.95%.
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CBSH $41.15 4.10%
AAPL $93.79 0.10%
FB $102.01 0.10%
GOOG $682.32 -0.12%
TSLA $151.04 0.38%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

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