Updated from 1:04 p.m. EDT
Financial stocks took it on the chin Monday, after a noted banking analyst wrote in a note that loan losses at large-cap banks could exceed levels in the Great Depression.
Mike Mayo, who recently moved from Deutsche Bank to CLSA Asia-Pacific Markets, reinitiated coverage of the U.S. bank sector with an underperform, giving bearish ratings to 11 companies. He says the government's efforts to curtail the financial crisis may not help as much as expected.
The NYSE Financial Sector Index fell 2.4% to 3,127, outpacing losses in the Dow Jones Industrial Average, which was off fractionally.Citigroup (C) shares closed down 4.6% to $2.72. The bank earlier permanently named Mike Corbat as the CEO of Citi Holdings, its "bad bank" entity. Bank of America (BAC) shed 1.6% to $7.48. Mayo's note was counterbalanced by a bullish note on the stock from Rochdale Securities analyst Dick Bove, who expects it to return to "all-time highs." JPMorgan Chase (JPM) lost 3.7% to $28.20 and Wells Fargo (WFC) was off 6.7% to $15.25. Morgan Stanley (MS) shares fell 3.1% to $23.31 and Goldman Sachs (GS) shed 2.3% to $116.65. On the flip side, First Marblehead (FMD) shares rose 44.2% to $2.12 after it said it sold its ownership interest in NC Residuals Owners Trust, which owns the residual interests in all 15 of the National Collegiate Student Loan Trusts First Marblehead has facilitated.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
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.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
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.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV