NEW YORK (TheStreet) - Bank stocks were losing steam on Tuesday, as the threat of higher oil prices dimmed market enthusiasm about the economic recovery and legal issues continued to mount.
The KBW Bank Index of large-cap stocks lost 2.3% by the close of trading, off significantly more than broader market indexes, which shed just 1.3% to 1.6%. Stocks wavered as chaos continued in or near oil-producing countries in the Middle East, and crude prices were again approaching $100 a barrel.
Bank's ongoing legal woes were adding pressure to financial sector stock prices. Fifth Third (FITB) was among the worst performers on Tuesday after the regional lender disclosed a Securities and Exchange Commission subpoena regarding commercial loans.
Goldman Sachs (GS), which disclosed $4.3 billion in legal liabilities on Monday evening, fell 1.5% to $161.33 after the SEC filed insider trading charges against ex-director Rajat Gupta. Goldman hasn't commented on the issue.The four biggest U.S. lenders, Bank of America (BAC), Wells Fargo (WFC), JPMorgan Chase (JPM) and Citigroup (C), have disclosed in regulatory filings a potential $11.2 billion cumulative shortfall in reserves to cover legal losses over the past week. JPMorgan alone is the subject of 10,000 lawsuits, which vary in nature, size and seriousness. Big banks' legal woes have been exacerbated as the housing crisis crawls toward a close, with widespread investigations into problems with their mortgage and foreclosure practices. BofA closed down 2.5% to $13.93, Citi lost 2.4% to close at $4.57, JPMorgan lost 2.3% to close at $45.60 and Wells Fargo lost 1.9% to close at $31.65. News of Fifth Third's potential commercial mortgage problems seemed to affect share prices of regional competitors as well. Huntington Bancshares (HBAN) fell 4.1% to close at $6.56 while Capital One (COF) closed down 3% at $48.26. Regions Financial (RF) declined 2.8% to $7.43 and SunTrust (STI) shed 2.5% to $29.41. -- Written by Lauren Tara LaCapra in New York.
>To contact the writer of this article, click here: Lauren Tara LaCapra. >To follow the writer on Twitter, go to http://twitter.com/laurenlacapra. >To submit a news tip, send an email to: email@example.com.
Select the service that is right for you!COMPARE ALL SERVICES
- $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
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV