Tuesday's Financial Winners & Losers
Updated from 2:13 p.m. EDT with new stock prices
Financial stocks trailed the sinking broad market a day after
Federal Reserve
Chairman Ben Bernanke said the ongoing housing market turmoil will likely be a "significant drag" on the economy through early next year.
Evidence of the crunch, meanwhile, continued surfacing in fresh third-quarter results. Mortgage-security writedowns and mushrooming credit losses
ate into
Wells Fargo's
(WFC) - Get Report
quarterly profit -- which, at 68 cents a share, was 2 cents shy of Thomson Financial's consensus estimate despite gaining 6.2% over last year.
Shares of the San Francisco bank fell $1.41, or 3.92%, to $34.54, to weigh on both the
NYSE
Financial Sector Index and the KBW Bank Index. The trackers were recently plunging close to 2% apiece.
Also dampening both indices was Cleveland's
KeyCorp
(KEY) - Get Report
, which dropped 5.90% to $30.44 on a wide miss. Third-quarter continuing-operations income plunged by 23% from last year to 57 cents a share, or $224 million (less the effect of an accounting change). The Street was looking for 71 cents a share.
New York broker
Jefferies
(JEF) - Get Report
and Alabama bank
Regions Financial
(RF) - Get Report
each reported diminishing earnings that fell short of expectations. Shares shed 5.28% and 2.06%, respectively. Minneapolis-based
U.S. Bancorp
(USB) - Get Report
posted a penny per-share gain for a penny beat, but total earnings slipped slightly. Its stock gave up 0.49% to $32.35.
Citigroup
(C) - Get Report
was still suffering a day after unveiling a
tumbling third-quarter profit, with shares lately off 3.14% to $44.79, and troubled mortgage lender
Thornburg Mortgage
(TMA)
slid 3.55% ahead of today's scheduled postclose earnings release.
Out of earnings,
CNBC
reported that
Merrill Lynch
(MER)
CFO Jeff Edwards will "probably" be ousted from that position within the next few months for making upbeat comments on Merrill's financial health during a July conference call, less than three months before its announcement of
enormous third-quarter writedowns.
CNBC
cited "senior executives" at the firm. Merrill denied the report. Shares were down 2.46% to $71.79.
Elsewhere in the red,
Lehman Brothers
(LEH)
slipped 2.66% after mortgage-lending unit Aurora Loan Services disclosed it had axed 160 employees in response to housing-market woes, and
Navigators Group
(NAVG) - Get Report
lost 2.12% to $56.86 on a Friedman Billings downgrade to market perform from outperform.
But Boston bank
State Street
(STT) - Get Report
climbed 8.34% after third-quarter earnings totaled $1.15 a share, excluding one-time merger costs -- 21 cents better than the average analyst call, and 38.6% higher than last year. Revenue rocketed 47.9% year over year to a better-than-expected $2.24 billion. Shares gained $5.75 to $74.68.
SCPIE
(SKP)
was one of the sector's biggest price gainers after The Doctors Company agreed to buy it for $28 a share in cash, or roughly $281 million. Shares of the Los Angeles insurer surged 23.09% to $27.19 in light trading.
Finally,
Bear Stearns
(BSC)
gained ground on news that China's Citic Bank is in talks to take a stake in the New York firm, whose pair of troubled
subprime mortgage-focused hedge funds made the broker one of the hardest hit by the credit crisis. Shares tacked on $2.36, or 1.96%, to $123.05.