Financial Winners & Losers: Wachovia

Negative analyst sentiment drove down shares of investment banks and money center banks Monday, with Wachovia(WB Quote - Cramer on WB - Stock Picks) leading the way.

A Robert Baird analyst cut his price targets and earnings estimates on both regional banks and national banks, based on his concern about the upcoming second-quarter earnings period. The analyst expects loan defaults will lead to additional losses.

Wachovia, whose price target was cut to $20 from $30, slid to a 16-year low during the day's trading after the New York Post also reported that the bank may have to repurchase Prudential Financial's stake in their joint retail brokerage venture. The newspaper said that Prudential, starting on Tuesday, could force Wachovia to buy the insurer's 23% stake in the partnership, which it said was valued at roughly $5 billion. Wachovia shares, which hit a low of $14.70 Monday, closed down 4.3% to $15.53.

Bank of America(BAC Quote - Cramer on BAC - Stock Picks) was another sank to a seven-year low of $23.87, a loss of 2.9% for the day. And Dallas-based Comerica(CMA Quote - Cramer on CMA - Stock Picks) hit a new 52-week low of $25.73 in early trading, but closed down 4.7% to $25.63.

Investment banks took a beating when banking analyst Dick Bove suggested that Merrill Lynch (MER Quote - Cramer on MER - Stock Picks) would need to raise additional capital in the third quarter and might have to dump its 20% stake in Bloomberg. Merrill dropped 3% to $31.71.

Morgan Stanley(MS Quote - Cramer on MS - Stock Picks) shares fell1.7% after Ladenburg Thalmann analyst Richard Bove cut estimates after Moody's Investors Service on Friday said it might downgrade the investment bank's credit ratings. Bove cited concerns over management turmoil and that a downturn in the equity markets will affect the bank's bottom line. Morgan shares fell 64 cents to $35.88.

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