Financial Winners & Losers: MF Global
Financial stocks continued to slide Tuesday, as spiking oil prices and climbing inflation weighed on the sector.
Oil surged to a new high of $128.92 and the Labor Department's measure of the cost of goods at the wholesale level, excluding the volatile effects of energy and food, rose 0.4% in April from the prior month. That's double the increase that economists were expecting, and also twice the price pickup of the prior month.
The
NYSE
Financial Sector Index declined 112.43 to 7,505.07.
The biggest loser of the day was futures and options broker
MF Global
(MF)
, which plunged 6.2% to $14.05 after reporting a fourth quarter loss due to a rogue wheat trader. The Bermuda-based company also said it had secured a $300 million commitment from private equity firm J.C. Flowers & Co.
Shares of
Fifth Third Bancorp
(FITB) - Get Report
and
Wachovia Bank
(WB) - Get Report
were falling after
The Wall Street Journal
reported the two banks and a third, unnamed bank had put more than $1.6 billion into
Citigroup's
(C) - Get Report
Falcon Strategies hedge fund through their bank-owned insurance programs. The fund has lost 75% of its value since then. Fifth Third dropped 48 cents to $19.99 and Wachovia slid 63 cents to $26.73. Citigroup was giving back 88 cents to $22.11.
JPMorgan Chase
(JPM) - Get Report
CEO Jamie Dimon told shareholders at the bank's annual meeting that the purchase of
Bear Stearns
(BSC)
was "very risky and a tough proposition." He also suggested that the company would see lower first-quarter earnings than it anticipated from its operating of Bear. Shares fell 5% to $43.70.
Elsewhere, three investment banks decided to increase the chances of filling orders for illiquid financial instruments.
Goldman Sachs
(GS) - Get Report
,
Morgan Stanley
(MS) - Get Report
and
UBS
(UBS) - Get Report
agreed to open up "dark pools" -- trading systems which keep buyers and sellers anonymous -- in hopes of selling more product. Goldman dropped $1.97 to $182.43 and Morgan fell $1.40 to $44.80. UBS closed fractionally higher to $30.61.
The nation's largest mortgage lenders,
Fannie Mae
(FNM)
and
Freddie Mac
(FRE)
, continued sliding this week even after the Senate Banking Committee approved legislation to boost the housing market, but imposed a new regulator on the lenders. Fannie slumped 4.2% to $27.74 and Freddie gave back 2.6% to trade at $26.31.
Bank of America
(BAC) - Get Report
sold $2.7 billion in a preferred share deal on Tuesday, but it wasn't enough to overcome an increased loss forecast by an equity analyst. The banking giant tumbled 71 cents to $35.39.
One of the few financials to eke out a win on the day was
Progressive Corp.
(PGR) - Get Report
, which jumped 50 cents to $19.33. The auto insurance company was upgraded by an analyst, who said business was improving with better profits and growing revenues. The analyst also suggested that Progressive may make a major announcement next month.