Vultures Circle MF Global: Financial Loser
NEW YORK ( TheStreet) -- MF Global (MF) was the loser among financial names on Friday, capping a rough week for the commodities and derivatives trading firm, led by former New Jersey Governor and Goldman Sachs CEO John Corzine.
Shares of MF Global dropped another 16% on Friday to close at $1.20, making for a one-week decline of 67%, after Moody's and Fitch downgraded the company's debt to just above junk status.
MF Global's tumble began on Tuesday, with shares dropping 48% after the company reported a $191.6 million second-quarter loss and said it was exploring "strategic options." Bloomberg News reported on Thursday that MF Global had fully drawn two credit facilities this week, including one for $511 maturing in June 2012 and another for $690 million that is due in 2014.
The New York Post reported on Thursday that MF Global had reached out to Barclays PLC (BCS) subsidiary Barclays Capital, about a possible business combination. The Wall Street Journal reported on Friday that in addition to Goldman Sachs (GS - Get Report), possible acquirers for MF Global included State Street (STT - Get Report) and Macquarie Group.Shares of Goldman Sachs rose 1% to close at $115.86, while State Street was up 2%, closing at $41.99. The broad indexes pulled back slightly on Friday from the previous session's euphoria over European leaders' agreement on measures to settle the eurozone's sovereign debt crisis. The KBW Bank Index (I:BKX) closed at 41.82, down slightly for the session, but up 7.5% for the week. Bank of America (BAC - Get Report) was the winner among large U.S. financials, with shares rising over 4% to close at $7.34. The company still plans to roll out its famous $5 monthly checking account fees for customers using their debit cards to make purchases, unless those customers have multiple relationships with the bank Meanwhile, the Wall Street Journal reported that major competitors, including Citigroup (C - Get Report), JPMorgan Chase (JPM - Get Report), PNC Financial Services Group (PNC), U.S. Bancorp (USB), and KeyCorp (KEY), have decided not to roll-out similar fees. Large banks seeing shares rise 2% on Friday included Bank of New York Mellon (BK), closing at $22.41, and Regions Financial (RF), which closed at $4.27. Big banks seeing 1% gains on Friday included Citigroup, closing at $34.16; People's United Financial (PBCT), at $13.02; First Niagara Financial Group (FNFG), at $9.39; Capital One (COF - Get Report), at $46.90; and Huntington Bancshares (HBAN), closing at $5.47.
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