Sector Snap: Bove Says Avoid Regional Banks

NEW YORK (AP) — Prominent banking equities analyst Richard Bove said investors should buy avoid buying troubled regional banks, saying the stocks' big rally this summer outweighs a projected earnings recovery.

Troubled banks have drawn big bursts of funds due to a belief that their recovery will be more dramatic than better-off banks, the Rochdale Securities analyst said in a note to investors this weekend, and are now over-priced. If investors want to buy into banking, they should buy "higher-quality" names. He recommends the investment banks, Goldman Sachs Group Inc. and Morgan Stanley; the financial-services giants Bank of America Corp., Citigroup Inc. and J.P. Morgan Chase & Co.; and firms that focus on wealth management, such as Bank of New York Mellon Corp., Northern Trust Corp. and State Street Corp.

In late morning trading Monday, Goldman shares rose $2.42 to $165.93; Morgan Stanley added 72 cents, or 2.5 percent, to $30.42; Bank of America was up 62 cents, or 3.6 percent, to $18.09; Citi gained 23 cents, or 4.8 percent, to $4.93; JPMorgan climbed inched up 33 cents to $43.99; Bank of New York Mellon rose 47 cents to $29.59; Northern Trust shed 12 cents to $60.23; State Street added 91 cents to $54.38.