Financial Winners and Losers: BofA
Updated from 1:46 p.m. EDT
Bank stocks lost ground for second consecutive session Tuesday on news of more capital-raising moves by
Bank of America
(BAC) - Get Bank of America Corp Report
and
Bank of New York Mellon
(BK) - Get Bank of New York Mellon Corporation Report
.
Bank of America raised $7.3 billion from the sale of its stake in
China Construction Bank
, according to reports. A consortium that includes Temasek Holdings, Hopu Investment Management and China Life Insurance
purchased the shares
for a discount,
The Wall Street Journal
and
Bloomberg
TheStreet Recommends
reported, citing people familiar with the matter.
After opening higher, BofA shares lost 5.3% to close at $12.26.
Meanwhile, Bank of New York Mellon became the latest bank to announce a common stock offering in order to repay funds borrowed from the Troubled Asset Relief Program. The bank raised $1.2 billion after pricing 42 million shares at $28.75, it said Tuesday. The dilutive effect pressured shares, which finished lower by 3.8% to $28.43.
On Monday,
U.S. Bancorp
(USB) - Get U.S. Bancorp Report
,
KeyCorp
,
Capital One Financial
(COF) - Get Capital One Financial Corporation Report
and
BB&T
(BBT) - Get BB&T Corporation Report
each announced stock sales, pressuring the financial sector.
Principal Financial
(PFG) - Get Principal Financial Group, Inc. Report
, which was hit hard after announcing its own common stock offering Monday, fell another 3% despite an upgrade from Credit Suisse. The firm upped its rating on Principal to neutral from underperform and nearly doubled its price target to $23 based on improving liquidity position following equity offering.
Elsewhere,
Citigroup
(C) - Get Citigroup Inc. Report
said that the $45 billion in government capital it has borrowed has been used to make nearly that much in new loans. Shares slipped 5.2% to $3.66.
Other bank stocks were also performing poorly.
Wells Fargo
(WFC) - Get Wells Fargo & Company Report
fell 3.1%, and
JPMorgan Chase
(JPM) - Get JPMorgan Chase & Co. Report
slid 1.3%. Among regional banks,
Regions Financial
(RF) - Get Regions Financial Corporation Report
dropped 9.6%, and
SunTrust Banks
(STI) - Get SunTrust Banks, Inc. Report
gave back 12.4%.
On the earnings front,
MBIA
reported results late Monday that handily beat expectations. After surging in the premarket session, the stock tumbled 11.8% to close at $6.14.
Morgan Stanley
(MS) - Get Morgan Stanley Report
named Gary Lynch to the position of vice chairman. Lynch will retain his position as Morgan's chief legal officer, which he has held since joining the firm in October 2005. Morgan shares overcame a weak start to finish 1.3% higher at $26.42.
