Bank of America: Financial Loser

NEW YORK (TheStreet) -- Bank of America (BAC) was the loser among large U.S. financial names on Wednesday, with shares dropping 7.5% to close at $6.38.

The broad indexes sank after the Federal Reserve's Open Market Committee ended a two-day meeting, with the central bank announcing it would shift its investment strategy to further boost the economy, in a move known as "Operation Twist.. The Fed also said it would reinvest principal payments from agency debt ad agency mortgage-backed securities into more agency-backed MBS.

The KBW Bank Index (I:BKX) was down 5.5% to close at 35.39, with all 24 index components showing significant declines for the session.

Moody's Investor Service announced that had lowered its long-term debt ratings for Bank of America (BAC) and Wells Fargo (WFC), while lowering its short-term debt rating for Citigroup (C). The ratings agency said the cuts reflected the lower "probability that the US government would support" the banks, if needed.

Shares of Wells Fargo were down 4% to close at $23.71, and Citigroup declined over 5% to close at $25.52.

Shares of SunTrust (STI) declined over 7% to close at $17.60, after the U.S. Treasury announced that it was auctioning 17.9 million warrants to purchase SunTrust common stock, that the agency had received in 2008, when providing the Atlanta lender with $4.85 billion in federal bailout funds, through the Troubled Assets Relief Program, or TARP. SunTrust fully redeemed the preferred shares held by the government in March.

Larges banks seeing shares decline over 7% included Comerica (CMA), which closed at $22.69, and Huntington Bancshares (HBAN), closing at $4.66.

Big banks seeing 6% declines included JPMorgan Chase (JPM), closing at $30.26, and KeyCorp (KEY), which closed at $5.93.

RELATED STORIES:

6 Bank Stock Plays for Operation Twist >

Bank of America, Citigroup, Wells Fargo Cut by Moody's >

Bank of America Lays Off Industrials Bankers >

Tyco Split Could Find Bondholder Resistance >

Foreclosure 'Injury' Hotline Being Readied >

Banks Face Lost Decade of Revenue: Mayo >

Treasury Looks to Unload SunTrust Warrants >

Big Banks Ensnared in 'Poker Ponzi Scheme' >

10 Banks on Solid Financial Footing >

-- Written by Philip van Doorn in Jupiter, Fla.

To contact the writer, click here: Philip van Doorn.

To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.

>To order reprints of this article, click here: Reprints