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) -- Financial stocks showed a slightly more positive trend Friday after selling off all week. The

Financial Select Sector SPDR

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was in up a nickel in mid-morning trading to $14.16.

Citigroup was one of the better performers among U.S. large caps, up 1.06% in late morning trading to $3.91 following a positive report by Sandler O'Neill + Partners. Sandler analyst Jeff Harte wrote that the bank remains his top pick, as it was at the start of the year.

Harte cited several factors for his bullishness, including a strong tangible book valuation relative to peers, a buildup of "excess risk-based capital" that would allow for a share repurchase and improved financial disclosures. Harte also contends that Citigroup's international businesses remain strong, and that he does not believe current management will "drop the ball on risk management discipline," as their predecessors did in 2007 and 2008. Finally, Harte sees the potential for increased investment in Citigroup from institutional investors.

Citigroup also

plans to add 130 employees in Asia

to a unit that provides back office services to money managers, according to a report by

Dow Jones Marketwatch


Bank of America

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shares were keeping pace with Citigroup Friday morning, and were up 1.28%, to $13.23, shortly before midday. Bank of America has been the worst performer among U.S. banking giants since second quarter earnings were announced last month.

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Shares of the other two U.S. banking giants,

Wells Fargo

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JPMorgan Chase

(JPM) - Get JP Morgan Chase & Co. Report

, as well as investment banks

Goldman Sachs

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Morgan Stanley

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were all lower, though by less than one percent.

Among European banks,

Barclays PLC

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was one of the stronger performers, after seeing its shares hit hard earlier in the week on reports it would lay off staff in its investment bank due to a weak business environment. Barclays shares were up 2.44%, to $19.70, even as U.S.-listed shares of other European banks, such as

Royal Bank of Scotland

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were lower.

Another notable mover Friday was private equity goliath

Blackstone Group

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. Blackstone had been one of the few gainers Thursday after it got an upgrade from Goldman Sachs, but its shares were down more than 2% Friday following news it would buy energy company

Dynegy Inc.


for $547 million.


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.