AIG: Financial Winners & Losers
NEW YORK (
) --
American International Group
(AIG) - Get American International Group, Inc. Report
was among the losers of the financial sector Tuesday after an analyst cut its rating on the insurer due to concerns over its capital structure.
shares were down more than 6% after Keefe Bruyette & Woods analyst Cliff Gallant cut the firm's rating on the insurer to underperform from market perform with a $6 price target. Gallant argues that while AIG may report positive earnings per share, they cannot be valued in a normal sense because they do not accrue to the common shareholder but to the preferred shareholder.
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"Overall, under the current ownership and capital structure, we see little long-term value in the common shares, despite the strength of the underlying franchises," Gallant wrote in a research note. "Without a significant and unusual change in the company's financial and ownership structure, we view a run-off scenario as still realistic."
AIG shares were lately down $3.18, or 7.1%, to $41.33. Other insurer stocks traded lower in sympathy, with
MetLife
(MET) - Get MetLife, Inc. Report
fell 2.8% to $45.53 and
Hartford Financial
(HIG) - Get Hartford Financial Services Group, Inc. Report
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lost 0.7% to $29.41.
Elsewhere,
Goldman Sachs
(GS) - Get Goldman Sachs Group, Inc. Report
was in focus as several of the bank's executives appeared before the Senate Permanent Subcommittee on Investigations to testify on Goldman's role in the financial crisis following fraud charges by the
Securities and Exchange Commission
.
TheStreet's
Lauren LaCapra is hosting a live blog of the
Goldman Sachs testimony
. Goldman trader Fabrice Tourre joins CEO Lloyd Blankfein, CFO David Viniar and others in testimony that began at 10 a.m. ET.
Goldman Sachs shares were climbing by 1.3% to $153.95.
Most other major U.S. bank stocks were trading lower.
Citigroup
(C) - Get Citigroup Inc. Report
was the biggest decliner, down 2.3% to $4.51, one day after the Treasury Department announced the first step in divesting its 7.7 billion-share stake in the bank.
In addition,
Bank of America
(BAC) - Get Bank of America Corp Report
slipped 0.4% to $17.98,
Wells Fargo
(WFC) - Get Wells Fargo & Company Report
was off 0.4% to $32.58,
Morgan Stanley
(MS) - Get Morgan Stanley Report
lost 0.4% to $30.81, and
JPMorgan Chase
(JPM) - Get JPMorgan Chase & Co. Report
dipped 0.3% to $43.75.
The dip in bank stocks came after Senate Democrats failed to get the 60 votes needed to proceed on the regulatory overhaul, which left President Obama "deeply disappointed" at the slow pace of
financial reform
. One Democrat, Ben Nelson of Nebraska, sided with Republicans in the 57-41 vote to stall the reform bill.
In other bank news,
(DB) - Get Deutsche Bank AG Report
was in focus after the German bank said first-quarter profits rose 50% to 1.8 billion euros ($2.4 billion) on strength in its global investment banking operations.
Deutsche Bank said net revenue at its corporate and investment banking operations was 6.6 billion euros compared with 4.9 billion euros a year earlier. Still, Deutsche Bank shares fell 2.7% to $71.18.
Among other financial firms out with earnings Tuesday,
Lazard
(LAZ) - Get Lazard Ltd Class A Report
gained 3% to $39.37 on its first-quarter results, and
CIT Group
(CIT) - Get CIT Group Inc. Report
rose 1.2% to $41.20 on a first-quarter profit.
Synovus
(SNV) - Get Synovus Financial Corp. Report
, meanwhile, lost 6.1% to $3.23 after the company said it is seeking to improve its Tier 1 common equity ratio through a $400 million offering of common stock and a $200 million offering of tangible equity units.
-- Written by Robert Holmes in Boston
.
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