Merrill Slashes Outlook for Banks

Bank stocks remained volatile on Friday, as a growing chorus of analysts expect higher loan losses and necessary reserve building as the first half of the year comes to an end.

Large and regional bank stocks took an initial nosedive after Merrill Lynch cut earnings estimates for 12 companies including Bank of America(BAC Quote), BB&T(BBT Quote), Fifth Third Bancorp(FITB Quote), National City(NCC Quote), Regions Financial(RF Quote), SunTrust Banks(STI Quote), Wachovia(WB Quote) and Wells Fargo(WFC Quote).

The NYSE Financial Sector Index was falling 118 points Friday afternoon, but a few banks, like Huntington Bancshares(HBAN Quote) and Fifth Third, were able to buck the trend, aided by other news. ...