NEW YORK (TheStreet) -- Financial stocks slid again on Monday - with regional names like Fifth Third Bancorp (FITB) getting hit particularly hard - as higher oil prices weighed on investors' expectations for the economic recovery.
In late-afternoon trading, Fifth Third closed down 2.2% at $13.59. Regional competitors were also losing ground, with Huntington Bancshares (HBAN) down 1.7% at $6.54, People's United (PBCT) down 2% at $12.42 and SunTrust Banks (STI) down 1.7% at $28.91.
Oil prices closed above $105 per barrel on Monday, with gasoline topping $3.50 per gallon. The price hikes were driven by concerns about unrest in the Middle East. Banks are particularly sensitive to the effect of petroleum prices, since paying more for energy can curb economic activity.
KeyCorp (KEY) was one of the few winners among big regional stocks, closing up 0.2% in recent trading at $9.28. Rumors that the Cleveland-based lender might be near a deal to sell itself to TD Bank (TD) likely helped to shore up its stock price, though analysts were quick to throw cold water on that notion.Investors were also bracing for more news from Bank of America (BAC), whose investor day is Tuesday. That bank's stock has been battered by mounting legal and mortgage-related costs, after the bank lost $2.2 billion in 2010 and recently doubled a goodwill writedown charge for its card division to $20.3 billion. Wall Street appears to be hoping that CEO Brian Moynihan will give investors something to be optimistic about. BofA's stock closed down 0.6% at $14.04, a similar decline to money center competitors like Citigroup (C), which fell 0.7% at $4.51 and JPMorgan Chase (JPM), which fell 0.7% at $45.21. Citi and BofA were the most actively traded stocks on the New York Stock Exchange, with 315 million and 104 million shares trading hands, respectively. Another big bank, Wells Fargo (WFC), said it would hire 1,000 staffers as part of its build-out of Mid-Atlantic operations. The San Francisco-based lender closed down 0.6% at $31.72. Those four banks, as the top mortgage servicers in the country, are dealing with authorities regarding a legally binding overhaul of mortgage servicing and foreclosure practices as well as monetary penalties for past mistakes. Last week, major mortgage servicers received a document from state and federal officials that detailed the manner in which they will be expected to operate with homeowners. -- Written by Lauren Tara LaCapra in New York.
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