DES MOINES, Iowa (AP) â¿¿ Bank stocks were slipping into negative territory Tuesday, feeling the downward pressure from a potential ratings downgrade for the 15 countries that use the euro and for Europe's bailout fund.
The downgrade threats came from the American rating agency Standard & Poor's. If S&P does downgrade those countries' credit ratings, that could increase the risk of them defaulting on their debt, which some analysts fear could weaken the U.S. economy further creating credit problems for U.S. banks.
Shares of many regional banks fell by early afternoon. Cullen/Frost Bankers Inc. fell 22 cents to $51.03, Iberiabank Corp. was down 30 cents to $49.49, and Bank of Hawaii Corp. slid 38 cents to $42.39. First Horizon National Corp. was down 35 cents, or 4.4 percent, trading at $7.43, and Bank of the Ozarks Inc. fell 12 cents to $27.79.
Some major banks hovered between positive and negative territory. Bank of America Corp. fell 3 cents to $5.77, and Bank of New York Mellon was up 18 cents, trading at $20. Wells Fargo & Co. rose 3 cents to $26.77.Citigroup Inc. fell 49 cents to $29.34, and JPMorgan Chase & Co. was down 35 cents to $33.16. Not all analysts believe banks are at such risk, especially regional banks. In a monthly review of local and regional bank stocks, Wunderlich Securities analyst Kevin Reynolds said they have outperformed the S&P 500 Index, as a group, for more than two decades. Coupled with below-average stock valuations, all indications are that the banking industry is poised to outperform the broader market over the long term as the economy recovers. He points to several indicators of bank health: â¿¿ Unemployment is improving. The national rate fell to 8.6 percent in November, its lowest point since March 2009. The nation's output measured by Gross Domestic Product increased for the ninth consecutive quarter in the third quarter.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $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
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV