Financial Winners & Losers: Citi, Barclays

Shares of the major U.S. financials are sluggish at midday Tuesday, as Citi shares continue to be pressured by the government's plan to sell its stake, and a lack of economic data gives investors little reason to show more confidence.

Author:: Eric Rosenbaum
Publish date:: Mar 30, 2010 5:17 PM EDT

(Financial winners story updated for Citi, financial stock market close info)

NEW YORK (

TheStreet

) -- The financial sector had a down day on Tuesday, with losses for most of the major U.S. financial institutions.

Citigroup

shares continued to be under pressure on Tuesday, with a 2.1% loss, or a loss of 9 cents, to $4.09. The U.S. government announced Monday that it would begin this year an orderly sale of its stake of 7.7 million shares in Citi.

On Monday, Citi shares dropped by twice as much as Tuesday's loss, or 20 cents to a closing price of $4.18. Trading in Citi shares was elevated again on Tuesday, with 619 million shares traded. On Monday, more than 886 million Citi shares were traded. The average daily volume for Citi is 524 million shares traded.

Bank of America was also among the financial losers on Tuesday, with a loss of close to 1.6%, or 28 cents, to $17.76.

Even after a losing day on Tuesday, Citi and Bank of America shares remain higher as March ends than the share prices at which the big banks trading to begin the month. Bank of America and Citigroup were more or less going out like lambs after a month of steadily increasing share prices.


Who Owns Citigroup? George Soros Bruce Berkowitz Prince Al-Waleed

Barclays' 1.8% decline on Tuesday was the second-worst behind Citi's drop. Barclays was another March lamb, having begun the month trading at $18.60 and, even after Tuesday's decline, seeing shares at $21.69.

The U.S. financial sector as a whole was down slightly on Tuesday, reflecting the overall market enervation. The S&P 500 ended marginally negative and the Dow Jones Industrial Average was up barely by day-end on Tuesday while the financial sector was down by 0.3%.

Goldman Sachs

(GS) - Get Report

was down by 1.5% on Tuesday, with shares suffering as part of the general selloff in financials.

Morgan Stanley

(MS) - Get Report

was down a little under 1% on Tuesday as Barclays cut its estimate on Morgan Stanley's first quarter earnings from 80 cents per share to 47 cents, citing weak equity trading levels.

JPMorgan Chase

(JPM) - Get Report

shares also declined less than 1%, or 28 cents to $44.58.

On Monday night, the

Associated Press

reported that federal regulators are opposing a $1.4 billion tax refund for JPMorgan Chase stemming from the bankruptcy reorganization of Washington Mutual's holding company.

Morgan Stanley and

Mitsubishi UFJ Financial

(MTU)

finally announced on Tuesday a definitive agreement to begin a combined brokerage operations business in Japan on May 1, a joint venture in which Morgan Stanley will hold 40% interest. There had been previous press reports that the financial companies were struggling to get the deal done in time for the May 1 deadline.

Shares of Mitsubishi UFJ Financial were flat on Tuesday.

The lack of meaningful market data was an issue for the financial sector on Tuesday, as the market awaited the next big piece of news related to the recovery in the U.S. economy: Friday's non-farm payroll report.

The median forecast for nonfarm payrolls is for a rise of 190,000 in March, after falling 36,000 in February. Economists were expecting a recovery in the U.S. nonfarm figure due to hiring by the government for the decennial census and more moderate weather in March. If the nonfarm payroll figure meets expectations, it would be only the second time since the recession started in December 2007 that nonfarm payroll has increased.

The closely watched Standard & Poor's Case-Shiller Home Price Index edged up in the most recent month, but Tuesday morning's latest Case-Shiller data was described as "mixed" by S&P, as the big rebounds made last fall in home pricing seems to reach a point of exhaustion. Some analysts continue to predict a double-dip in housing prices.

Stressed Irish banks were the real financial movers on Tuesday.

It was revealed on Tuesday that

Allied Irish Banks

(AIB)

would need to raise as much as 7.4 billion euros by the end of this year to plug capital shortfalls, under a plan announced by Ireland's banking regulator.

AIB said on Tuesday that it would seek to sell its U.K.-based businesses and also do an equity raise this year.

On Tuesday, AIB shares were down more than 8%. More than 31 million Allied Irish shares were traded on Tuesday, versus an average volume of trading under 5 million shares.

If the Irish banks cannot raise sufficient capital, the Irish government is expected to take control of as much as 70% of Allied Irish Banks, whereas Bank of Ireland's stronger financial position may result in a 40% total stake by the Irish government.

AIB's woes were set against a huge spike in shares of

Bank of Ireland

(IRE)

. Bank of Ireland is expected to announce with its fourth quarter earnings on Wednesday that it is on target with its capital-raising requirements in 2010 -- it is estimated that Bank of Ireland only needs to raise 2.7 billion euros.

Bank of Ireland shares were up just short of 20% at the close on Tuesday, with more than 7 million shares traded, versus an average trading volume of 1.5 million shares.

Both Irish banks have seen active trading in the past few days and began trading on Monday with big declines. Bank of Ireland's gains on Tuesday brought it back to the share price at which it closed last Friday.

-- Reported by Eric Rosenbaum in New York.

Follow TheStreet.com on

Twitter

and become a fan on

Facebook.