Wednesday's Financial Winners & Losers
The financial sector was replete with bad news yet again on Wednesday, though Tuesday's
As with so many others in the industry, mortgage-market cavorting has helped infect
(STI), making it the latest big bank to report that putrid market conditions essentially
SunTrust blames these results mostly on the shrinking value of holdings in mortgage-backed securities, collateralized debt obligations and structured investment vehicles (SIVs), as well as a costly restructuring of the SIVs. At the time of purchase, it said, these were all "predominantly AAA or AA-rated." The SIV bail-out was announced last month, along with news of SunTrust's share of a Visa antitrust settlement, which ended up costing the bank $76.9 million.
Also figuring in prominently were charge-offs of $168 million and a loan-loss provision that more than doubled sequentially to $356.8 million. Both of those figures are slightly under estimates given in December.In spite of all this, shares were climbing 5% to $64.05 following an initial tumble. That, along with Bear Sterns' burly upgrade of the broader large-cap bank sector -- to market overweight from market underweight -- helped push the KBW Bank Index 3.3% higher to 80.14. According to Reuters, the Bear analyst argued that, thanks to the Fed's rate cut and a spree of capital infusions, these stocks can't go down much further. Banking giants Citigroup (C), JPMorgan Chase (JPM) and Bank of America (BAC) were all trading up 5.4% or more. And shares of bond insurer Ambac (ABK) continued clawing their way back from the precipitous drop they took last week, even after yesterday's report of an
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