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Barclays, Citi: Financial Winners & Losers

International banking earnings outperformers, led by Barclays, rule the financial stock roost on Tuesday -- although there is a general rally among U.S. financial stocks.

(Financial winners & losers story updated for market close)



) -- International bank quarterly profits were the big winners in the financial sector on Tuesday, but it was also a big rally day for the U.S. financials, as banking stocks joined energy stocks as the lead sectors in a U.S. market rally.



(BCS) - Get Barclays Plc Report

and Australia's

Westpac Banking


were both up in the double digits after earnings outperformance. Westpac's earnings outperformance was the spearhead of a rally among all Australian banking stocks on Tuesday.

Bank of America

(BAC) - Get Bank of America Corp Report

led gains among U.S. financials on Tuesday, rising 4.9%, or a gain of 71 cents in its share price to $15.16.

Bank of American announced on Tuesday morning that the number of home mortgages it had moved into the federal government's HAMP loan modification program had quadrupled in the most recent month.

Still, Bank of America's share gain on Tuesday was tied to the general rally by the banking sector and financial stocks more generally. The financial sector was up more than 2% on Tuesday.

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The holiday-shortened week started with what was, in effect, a catch up day for the bank stocks. Bank of America's shares ended last week down 50 cents from where Bank of America shares began trading last Monday. It was a rocky week for the bank stocks last week as the European nations mired in the Greek budget fiasco left investors jittery.


(C) - Get Citigroup Inc. Report

ended Tuesday up just over 4% for the second-biggest gain among the U.S. banks. Citigroup shares gained 13 cents to a closing price of $3.31 on Tuesday.

As in the case of Bank of America, there was no big news from Citi on Tuesday. Citi was reportedly getting aggressive on the hiring front in Australia. The Australian press reported that Citi has been rebuilding its research down under after having slashed staff during the financial crisis. Citi is reportedly rebuilding the Australian research staff with a focus on Aussie leading industries of energy, finance and real estate. Most notably, Citibank has hired Mark Greenwood away from

J.P. Morgan

(JPM) - Get JPMorgan Chase & Co. Report

, who will become the head and managing director of their energy research unit.

American Express

(AXP) - Get American Express Company Report


Goldman Sachs

(GS) - Get Goldman Sachs Group, Inc. Report

, meanwhile, ended Tuesday's trading session up 2% and 3% respectively, gains that were more or less in line with the general financial sector positive momentum.


New York Times

berated Goldman over the weekend for its role in helping Greece to hide the widening budget woes by complicated "non-lending" transactions; there was, however, no populist rage against Goldman stock on Tuesday. In fact, those hefty profits from Greece's national lottery system may continue to be a lucky draw for Goldman gamblers.

What's more, for once Goldman was not the bonus villain on Tuesday, as Barclays's big earnings led to estimates that the U.K. bank will pay out more bonus money as a percentage of revenue than Goldman -- 38% versus 36% for Goldman, its lowest percentage since going public in 1999.


(AIG) - Get American International Group, Inc. Report

was up just over 2%, to $27.43 on Tuesday, or a gain of 61 cents. Pension investors -- including the Police and Fire Professionals of America Retirement Fund and the Central Laborers' Pension Fund -- filed suit in the New York State Supreme Court against Morgan Stanley for its record level of payouts in 2009. News of the latest attack on street pay did little to stop Morgan Stanley from rising along with the financial tide. Morgan Stanley was up 1.7% on Tuesday at midday, or 46 cents, to $27.63.

JPMorgan and Morgan Stanley's performance on Tuesday was also in line with the financial sector rally, up 2.8% and 2.4% respectively. JPMorgan gained $1.12 on Tuesday to close at $40.07.

JPMorgan did in fact have some big news on Tuesday, announcing that its investment banking arm would acquire RBS Sempra Commodities' global oil, global metals and European power and gas assets. The transaction is expected to close in the second quarter of 2010 and J.P. Morgan is expected to pay $1.7 billion for the RBS Sempra assets.

While the European Union crisis is far from resolved, the earnings from Barclays seemed to override those concerns. Barclays' CEO even commented specifically about the crisis to the

Wall Street Journal

on Tuesday, saying he was confident it would be resolved.

The Barclays profit of 11.6 billion pounds ($18.2 billion), was highlighted by a 6.3 billion pound gain on the sale of Barclays Global Investors. Barclays' earnings were up 92% from 6.1 billion pounds in 2008, and beat the average forecast of 11.2 billion pounds from a

Thomson Reuters

analyst poll. Leaving out the gain from the sale of BGI, Barclays's profit was 5.6 billion pounds, up from 1.6 billion in 2008.

Barclays was up more than 14% at the close on Tuesday, to $19.03, or a gain in its ADR share price of $2.35 on the day. Barclays' ADR share also traded at a level almost three times its average daily volume on Tuesday -- 6.4 million shares versus an average level of 2.7 million shares.

The high profile of international winners in banking did nothing to stop Tuesday from being another bad day for the

National Bank of Greece


, which has been among the financial losers day after day ever since the budget crisis in Greece roiled the European markets. Since Jan. 8, the National Bank of Greece has shed more than $2 of its share value, and closed at $3.85 on Tuesday, or a daily drop of 3% on more than double it average daily volume -- close to 8 million shares traded versus an average of 3 million shares traded.

-- Reported by Eric Rosenbaum in New York.


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