This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Bank Stocks Pummeled on Shutdown Day 7

Stocks in this article: BACCCOFI:BKX

NEW YORK ( TheStreet) -- Major U.S. banks led the market lower on Monday, which was the seventh day of the partial shutdown of the federal government.

The broad indices all saw declines of nearly 1%, but the KBW Bank Index (I:BKX) saw a much larger decline of 1.7% to 61.93, with all 24 index components down for the session. Big banks seeing shares decline nearly 2% included Bank of America, which closed at $13.81; Citigroup, at $48.19 and Capital One, which closed at $69.93.

Please see TheStreet's Big 4 Bank Earnings Preview for more on the rough third-quarter earnings season ahead for Bank of America, Citigroup, JPMorgan Chase (JPM) and Wells Fargo (WFC).

The major story this earnings season will be the decline in mortgage lending revenue, as rising long-term interest rates have slowed refinancing applications from their elevated pace. Atlantic Equities analyst Richard Staite on Sept. 23 estimated that the eight large-cap U.S. banks he covers, including the "big four" would see a combined 45% sequential and 55% year-over-year drop in mortgage revenue. Staite also expects the group to see a 20% year-over-year decline in trading revenue.

Please see TheStreet's earnings preview for credit card lenders for plenty of detail on what to expect from Capital One and its major competitors.

The Debit Limit Battle

As most investors know, the big battle in Washington between the Republican-controlled House of Representatives and the Democrat-controlled Senate is not limited to an agreement for a fiscal 2014 budget.

The government can certainly be run without a budget, if the two houses agree to pass the necessary spending bills. Even more importantly, the government is fast approaching its $16.7 trillion debt limit. U.S. Treasury Secretary Jack Lew in a letter to House Speaker John Boehner (R., Ohio) on Sept. 28 said the "extraordinary measures" the Treasury was taking to maintain its borrowing power will "be exhausted no later than Oct. 17," unless the $16.7 trillion federal debt limit is raised.

The House Republicans have passed four spending bills over the last week to keep parts of the government open, but these bills have been rejected by Senate Majority Leader Harry Reid (D., Nev.) because the Republicans continue to insist on tying an eventual full budget agreement to a one-year delay in the implementation of the Affordable Care Act, which is President Obama's signature legislative accomplishment.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,827.75 +12.81 0.07%
S&P 500 2,072.83 +5.80 0.28%
NASDAQ 4,787.3170 +29.0650 0.61%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs