Stocks Plunge to Year's Lows

While concern about geopolitics and interest rates has taken a heavy toll on financial stocks over the last month, bank investors had another big buyout to lift their spirits. SunTrust(STI) announced last night it was acquiring National Commerce Financial(NCF) for about $7 billion, beating out Fifth Third Bancorp(FITB) in a brief bidding war. The combined bank will be the nation's seventh-largest, with about $148 billion in assets. Shares of SunTrust lost $5.19, or 7.8%, at $61.69, while National Commerce closed down 84 cents, or 2.6%, to $30.96.

Investors could also breathe easier about a fall in the price of oil following a comment from the Saudi oil minister for an OPEC production increase. Crude futures traded down $1.09 on the Nymex to $38.84 a barrel.

In other corporate news, Citigroup (C) said it will pay $2.65 billion to settle a class-action suit brought by holders of WorldCom stocks and bonds who claimed it had participated in the massive fraud with the phone company. The financial giant admitted no wrongdoing but said it has increased its reserve for other pending class-action cases against it to $6.7 billion. Its shares closed down $1.36, or 2.91%, to $45.36.

In earnings news, Charter Communications (CHTR) reported wider first-quarter losses this year having absorbed losses previously attributed to minority interests. The broadband communications provider reported a net loss of $294 million, or $1 a share, compared to last year's loss of $182 million, or 62 cents a share, but it increased revenue thanks to added subscribers. Its stock closed down a quarter, or 6.5%, at $3.61.

Cablevision (CVC) narrowed its first-quarter loss on higher revenues, selling additional services to its cable customers such as high-speed data and telephone services. It earned $120 million, or 42 cents a share, compared to $151 million, or 54 cents a share, in the same quarter last year. Its shares ended down 67 cents, or 3.1%, at $20.95.

Before Tuesday's opening bell, May Department Stores (MAY) is expected to report first-quarter earnings of 27 cents a share, up from last year's 13 cents a share. However, the markets will be largely focused on Cisco's(CSCO) earnings announcement, due out after the closing bell. The tech giant is expected to report first-quarter earnings of 18 cents a share, up from 15 cents a share.

No major economic releases are scheduled for Tuesday.

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