The broad indexes showed 1% declines, as apprehension over next week's election outweighed the announcement by the U.S. Bureau of Labor Statistics that total U.S. nonfarm employment grew by 171,000 in October, which was way above the consensus forecast of 125,000, according to Briefing.com. Despite the job creation, the national unemployment rate increased to 7.9% from 7.8% the previous month.
The KBW Bank Index (I:BKX) was 1% to close at $50.09 ,with all but three of the index components showing declines for the session. The KBW Insurance Index was down over 1% to close at 125.02, as 21 out of 24 of the index components pulled back.
AIG's shares have now returned 41% year-to-date, following a 52% decline during 2011.The shares trade for nine times the consensus 2013 earnings estimate of $3.51 a share, among analysts polled by Thomson Reuters. AIG late on Thursday reported third-quarter after-tax operating income of $1.6 billion, or $1.00 a share, beating the consensus estimate of 86 cents, among analysts polled by Thomson Reuters. Earnings improved from an after-tax operating loss of $3.0 billion, or $1.58 a share, in the third quarter of 2011. During the company's earnings conference call on Friday, CEO Robert Benmosche said "so for the year we've been able to buy back $13 billion of our shares, $8 billion just in this quarter alone." The company bought back most of the U.S. Treasury's stake of AIG common shares, and the Treasury said in September that it had fully recovered the $182 billion it had committed to stabilize AIG in 2008 and 2009. The Treasury still holds just under 16% of AIG's common shares. Benmosche said on Friday that in addition to making the government whole on its investment in the company, there was "a combined positive return to the American taxpayers of more than $15 billion to date. When asked about the company's plans for further deployment of excess capital, since AIG's total capital ratio was 20% as of Sept. 30, Benmosche said that "while our focus has been on share buyback up until now, our focus going forward on capital management, working closely with [the Federal Reserve, which now regulates AIG as a "systemically important financial institution] in terms of what we're able to do, we're going to now focus on our coverage ratio, and that's going to be looking at our debt, and our ability to cover the debt with earnings."
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