Citi, AIG: Financial Winners & Losers
("Citi, AIG: Financial Winners & Losers" article updated for Tuesday market close and additional analysis of financial stocks)
NEW YORK (
) --
Citigroup
(C) - Get Report
is back in business.
AIG
(AIG) - Get Report
may continue with the business of selling off assets, according to market buzz that lifted AIG shares hugely on Tuesday afternoon.
In the case of Citi being "back in business," that was the sentiment from research firm
CreditSights
on Tuesday. The positive outlook sent Citigroup shares up more than 7% on Tuesday, to close at $3.82, or a gain of 26 cents.
A whopping 1.1 billion shares of Citigroup were traded on Tuesday. Citi's average daily trading volume is 340 million shares.
CreditSights wrote in a research report released on Monday night that Citigroup was "back from the brink and back in business."
The research firm defined Citi as a "work in progress" but indicated that the bank's debt and equity should benefit from its branch-light configuration, international diversification and improving liquidity. Above all, Citigroup shares are cheap, the research firm noted.
As far as Citi's share price, however, Citi is not back from the brink as much as the shares are back from where it was trading at in December. On Dec. 8, Citi shares closed at $3.91, and for much of November, Citi shares had traded above $4.
The cheapness of Citi shares was something noticed by big hedge fund investors in recent months also. Both
John Paulson and George Soros were heavy buyers of Citi shares in the fourth quarter of 2009 (view
and
at Stockpickr).
Tuesday's rally in Citi and AIG shares was not triggering a larger rally in U.S. financials. The financial sector finished Tuesday only up a meager 0.2%, in line with marginal gains from the major U.S. equity indexes.
Another John Paulson favorite,
Bank of America
(BAC) - Get Report
, finished Tuesday up a little less than 1%, or 12 cents, to $16.86.
AIG's torrid share spike on Tuesday afternoon was fueled by a
Bloomberg
report that more asset sales are on deck for the reorganizing insurer.
In the past week, AIG has announced the sale of both its Asian and international life insurance units.
After trading flat for most of the morning, AIG shares soared from a value of $29 all the way up to $35 between 1 P.M. and 2 P.M., before ending Tuesday with a gain of $3.67, and a closing price of $32.77.
Similar to the enormous trading in Citi shares, there were 58 million shares of AIG traded on Tuesday, a huge amount of speculative trading in comparison to the AIG average daily trading volume of 13.5 million shares.
There was also some market chatter on Tuesday afternoon that trading in AIG shares was being influenced by government plans to place restrictions on the shorting of stocks which the government owns.
Goldman Sachs
(GS) - Get Report
stock was up modestly, with a gain of 1% on Tuesday. It was another non-reaction from Goldman investors, after another bad day of press for the whipping boy of Wall Street's "nefarious" financial wizards.
On Monday, a pension fund began a lawsuit over the contentious topic of Goldman executive compensation.
The International Brotherhood of Electrical Workers union's pension fund sued Goldman on Monday to seek limits on compensation for the bank's management, and making Goldman Sachs management, rather than shareholders, responsible for charitable contributions.
JPMorgan Chase
(JPM) - Get Report
,
Wells Fargo
(WFC) - Get Report
and
American Express
(AXP) - Get Report
were trading near flat on Tuesday, mirroring a less than 0.6% gain for the U.S. financial sector.
Morgan Stanley was down close to 2% on Tuesday, or a decline of 53 cents to $29.05.
The Securities and Exchange Commission initiated a lawsuit against a former Morgan Stanley and Bank of America loan trader, Salvatore Zangari, who allegedly steered trades to other brokerage firms in exchange for cash kickbacks. However, the gains made by Zangari, allegedly at the level of $100,000 to $150,000, do not represent the type of lawsuit with the power to move a financial stock.
The biggest loser among financials was money manager
Invesco
(IVZ) - Get Report
, down 4.7% on Tuesday, or a loss of 99 cents to $20.09. Invesco shares had eclipsed their average daily trading volume of 5 million by midday Tuesday, and finished the day with more than 11 million shares traded.
Invesco released its latest assets under management report on Monday, showing no sales growth in the prior month.
-- Reported by Eric Rosenbaum in New York.
RELATED STORIES:
>>Paulson and Soros Buy Citi -- Would You?
>>Soros Matches Paulson's Bet on Citi
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