Negative comments from an analyst on the investment banks sector put pressure on those stocks as Tuesday most financial stocks traded to the down side.
Oppenheimer analyst Meredith Whitney cut her earnings outlook, saying that the short-term future would be worse than what the market currently has priced in.
dropped 47 cents to $48.68 after the analyst suggested that accounting gains may have to be reversed. The gains were booked through a mark-to-market accounting rule during the first quarter, but since then the spreads that triggered the gains have narrowed and may have to be backed out.
Other firms facing a similar fate are
, which gave back 49 cents, or 2.1% to $23.15, and
, which tumbled 83 cents, or 1.7%, to $46.82.
, which had booked a $600 million gain, was dropping $1.26, or 2.8%, to $43.29.
, which only booked $300 million, was still declining 0.4% to $191.37.
The biggest loser of the day was
, shares of which crumbled after an analyst suggested that the mortgage lender would need to raise a significant amount of capital. The analyst also cut his target price from $3 to $1 a share. Shares of the beleagured lender declined 71 cents, or 23.2%, to $2.35.
The NYSE Financial Sector index was down on the day, sliding 66.83 to 7,614.93 as sluggish retail sales numbers continued to weigh on the market.
Bank of America
said its customers were feeling "significant economic pressure" since they can no longer tap into home equity lines of credit as house prices decline. The nation's second-largest banks also said that it was being hit with increased credit costs. Shares ticked down 1.6% to $36.84. But the bank said its deal for
was still slated to close in the third quarter. That was good news for Countrywide investors, as the stock shot up 5% to $5.03.
Chairman Ben Bernanke made comments on Tuesday that were considered to be positive for the market, but it still didn't ease investor concerns for government-sponsored entities
. Freddie Mac gave back 2.8% to $25.17, and Fannie Mae fell 0.7% to $28.05.
was also losing ground after saying its unrealized losses on its investment portfolio were holding steady at $1.9 billion. The stock tumbled 4.2% to $71.58.
One of the few winners on the day was
, shares of which jumped 4% to $8.51, after Friedman Billings upgraded the stock to market perform from underperform. The stock's target price was raised from $6 to $8. However, the stock is expected to continue to be volatile.