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
TheStreet Open House

Big Banks: Settlement Fear Losers

Stocks in this article: JPM BAC C STI I:BKX

NEW YORK ( TheStreet) -- SunTrust (STI - Get Report) of Atlanta was loser among major U.S. banks on Wednesday, with shares down nearly 3% to close at $33.64.

The broad indices all ended lower, dragged down in part by Caterpillar (CAT), which reported an 18% year-over-year drop in third-quarter revenue to $13.423 billion, with earnings-per-share declining 43% to $1.45. Caterpillar lowered its guidance for 2013, saying it expected full-year revenue to be down 17% to $11 billion.

"This year has proven to be difficult, with expected sales and revenues nearly $11 billion lower than last year," Caterpillar CEO Doug Oberhelman said in the company's earnings release. "We expect Resource Industries to be down close to 40 percent for the full year and Power Systems' and Construction Industries' sales to each be down about 5 percent," he said.

"Not only is mining down from 2012, the demand for equipment has been difficult to forecast," Oberhelman said, adding that the company early in 2013 had expected order rates to improve later in the year, "based on strong mine production for many commodities."

Settlements Won't Settle Risk for Big Banks

The KBW Bank Index (I:BKX) on Wednesday was down 0.7% to 64.68, with all but five of the 24 index components ending with losses. Big banks seeing the largest declines included JPMorgan Chase (JPM - Get Report), with shares down 1.6% to $52.75, Bank of America (BAC - Get Report), with shares down over 2% to $14.23, and Citigroup (C - Get Report), which was down 1.3% to close at $50.10.

By setting aside $9.15 billion during the third quarter for litigation reserves, JPMorgan Chase signaled an eventual huge settlement of with the Department of Justice, Federal Housing Finance Agency other federal regulators and states' attorneys general, over investigations of the company's mortgage lending and loan sales, along with those of Bear Stearns and Washington Mutual, which JPMorgan acquired during 2008. The total figure for that settlement could reach $13 billion, according to media reports.

But the Wall street Journal on Wednesday reported that a group of investors, including BlackRock (BLK) and Neuberger Berman are seeking "at least $5.75 billion" from JPMorgan Chase, to recover losses on mortgage-backed securities sold to them by the bank and the firms it acquired.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

Jim Cramer's protégé, 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
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

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