This Day On The Street
Continue to site
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

Regions Financial Leads Banks as Consumer Confidence Rises

NEW YORK ( TheStreet) -- Regions Financial led major U.S. banks higher on Monday, with shares rising 2% to close at $9.82.

The Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC) ended with gains of 0.5%, while the Nasdaq Composite (^IXIC) rose 1.1%, after the Department of Commerce reported that U.S. personal consumption during November increased by 0.5%, following an increase of 0.4% in October.

The Commerce Department also said that personal income was up 0.2% during November after a 0.1% decline in October, when the federal government was partially shut down for two weeks.

The personal consumption growth number for November matched the consensus estimate among economists polled by Thomson Reuters, while the growth number for personal income was well below the 0.5% forecasted by economists.

Also on Monday, the Reuters/University of Michigan consumer sentiment index for December came in at a final reading 82.5, revised from the previous number of 75.1, for the best reading since July.

Sterne Agee chief economist Lindsey Piegza on Monday wrote in a client note that the decline in the U.S. personal savings rate to 4.2% -- the lowest level since February -- suggested a rise in consumer confidence, but warned that if the "reduced safety net" from lower savings "is met with a much harsher reality than expected, it will be much more difficult to maintain current consumption levels."

"Consumers are feeling more optimistic in the final month of the year thanks in part to a heightened ability to spend with equity markets at all time highs fueling a wealth effect and cheaper gasoline costs providing relief to monthly budgets. Additionally, rising property values are helping support consumers' optimistic assessment of future conditions. Still, in order to maintain this heightened confidence level and positive spending patterns, expectations will need to turn into reality sooner rather than later," Piegza warned.

The "Santa Clause rally" has been driven by the Federal Open Market Committee's decision last Wednesday to taper the Federal Reserve's "QE3" purchases of long-term bonds to $75 billion a month from $85 billion, starting in January, as well as the revision on Friday of the estimated U.S. gross domestic product growth rate to an annual rate of 4.1% from 3.6%.

The latest upward revision to the GDP growth rate also adds confidence in the 7.0% U.S. unemployment rate for November, which was a significant improvement from 7.3% in October.

The KBW Bank Index (I:BKX) on Monday rose 0.9% to 68.97, with all 24 index components ending with gains.  The index has risen 34%, following a 30% gain in 2012, underlying an amazing recovery for the banking sector.

Regions Financial

Shares of Regions Financial of Birmingham, Ala., have returned 39% this year.  The shares trade for 1.4 times tangible book value, according to Thomson Reuters Bank Insight.  The shares trade for 11.7 times the consensus 2014 earnings estimate of 84 cents a share and for 10.9 times the consensus 2015 EPS estimate of 90 cents.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr 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

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
RF $9.26 0.00%
AAPL $109.50 0.00%
FB $92.47 0.00%
GOOG $639.16 0.00%
TSLA $226.72 0.00%


Chart of I:DJI
DOW 17,050.75 +138.46 0.82%
S&P 500 2,013.43 +15.91 0.80%
NASDAQ 4,810.7880 +19.6360 0.41%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs