NEW YORK (TheStreet) -- Bank stocks were hammered on Wednesday, as investors considered the second day of the federal government shutdown and digested some disappointing employment growth numbers.
The broad indices reversed course from Tuesday, ending with declines, led by a 0.4% dip for the Dow Jones Industrial Average
The exceptions included Bank of America (BAC), which stood out with shares rising over 1% to close at $14.05, after New York Attorney General Eric Schneiderman announced the state was dropping its suit against the bank for its alleged failure to adhere to the $25 billion mortgage settlement. Schneiderman in a statement said Bank of America "has agreed to implement a robust set of systemic reforms intended to ensure that the servicing standards outlined in the National Mortgage Settlement are honored across New York State."
But Schneiderman also announced a new lawsuit against Wells Fargo (WFC), since the company had "taken a different path" and had "declined to sign any agreement aimed at improving its customer service practices." That is, Wells Fargo declined to sign an agreement drawn up by Schneiderman. Wells Fargo did agree to the National Mortgage Settlement, which included loan servicing reforms.Wells Fargo in a statement made clear its intention of seeing Schneiderman in court: "We are continuously implementing additional customer-focused measures based on the constructive feedback we receive from our customers, the [National Mortgage Settlement] Monitoring Committee and individual states, including New York." Wells Fargo went on to say "We are doing everything we can to help our customers remain in their homes, and over the last four years have completed more than 880,000 loan modifications nationwide including 26,000 modifications for borrowers in New York. That means we have done six modifications for every one foreclosure sale in the state since the beginning of 2009." Shares of Wells Fargo were down 0.6% to close at $41.26. In addition to the continued saturation of the federal government shutdown, which could lead to quite a painful spot for the U.S. Treasury if Congress fails to raise the federal debt limit by mid-October, investors on Wednesday were presented with some disappointing data from Automatic Data Processing.
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