Citi, Wells: Financial Winners and Losers
NEW YORK (
) -- Financial stocks were mostly weaker Friday in moderate to light trading. The
Financial Select Sector SPDR
(XLF)
an exchange traded fund that tracks the sector, was down 0.13% to $14.84 in afternoon trading.
Citigroup
(C)
and
Wells Fargo
(WFC)
were in the
news after they settled litigation involving the acquisition of
Wachovia
from the
Federal Deposit Insurance Corp.
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in 2008. Citigroup initially appeared to have reached a deal to acquire Wachovia for $1 per share, but then Wells ended up winning the bank with a $7 bid. Several
contend the issue caused extensive bad blood between FDIC Chairman Sheila Bair and Citigroup boss Vikram Pandit.
The situation has also been widely reported to have caused rifts among government officials, particularly
Bair and Treasury Secretary Tim Geithner
, who was New York Federal Reserve Chairman at the time of Wachovia's near collapse. Geithner has often been portrayed as being closely aligned with Citigroup, and was even considered for the top job at the bank,
The New York Times
.
The blanket settlement announced Friday in a joint press release states that Wells will pay $100 million to Citigroup to resolve the dispute. Stocks of both companies erased some of the day's losses shortly after the announcement, though the broader stock market indices moved up at about the same time. Citigroup shares were down 0.81% to $4.26, while Wells Fargo shares were 0.24% lower at $27.45.
Other big bank shares were similarly lackluster, with
Bank of America
(BAC)
dipping 0.56% to $11.64,
JPMorgan Chase
(JPM)
sliding 0.53% to $39.45 and
Goldman Sachs
(GS)
down 0.70% to $166.18.
Morgan Stanley was one exception to the weakness in the sector Friday. Shares of the securities giant were higher by 0.82% to $25.78.
--
Written by Dan Freed in New York
.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
