NEW YORK (
stock shed 1.9% to $4.08 on Wednesday after
Moody's Investor Services
cut its outlook on some of the nation's biggest banks on concerns that Dodd-Frank regulation will result in lower government support for banks.
The ratings firm affirmed its long- and short-term ratings but
Bank of America
and Citigroup to negative from stable. Moody's estimates that these banks' deposit and debt ratings are inflated by 3 to 5 notches, because of implied government support. But the new regulation may not be pro-banks.
The stock of Bank of America shed 1.3%, or 18 cents, to end the session at $14.01. Wells Fargo was lower by 1.1%, or 32 cents, at $28.07 at the end of trading hours on Wednesday.
Moody's also placed ratings of 10 regional banks under review for similar reasons, including
, which shed 2% to $25.56,
, down 2.9% to $12.76, and
, which inched up higher by 0.5% at $8.46.
More on Big Banks Here Come the Reserves!
Trading was quiet in
which ended flat, while
ended marginally positive.
Hudson City Bancorp
was a major gainer among the regional banks earlier in the trading session, rising 2.2% to $12.47 before cooling off to $12.43. The bank announced results last week and beat estimates.
jumped 4.2% to $12.60 after it reported a narrower-than-expected loss in the second quarter.
The stock of
is up 1.4% in extended trading at $76.06. The payment processor announced after the closing bell that it beat estimates by 4 cents.
was among the worst losers on Wednesday, sinking 10.4%, or $4.00, to $35.93 before recovering some of its losses to end lower by 8.5% at $36.55. The company missed estimates and issued a profit guidance that was lower than estimates.
East West Bancorp
was another prominent loser, plunging more than 11% to $15.74, on
-- Reported by Shanthi Venkataraman in New York.
Follow TheStreet.com on
and become a fan on
Copyright 2010 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.