BofA: Financial Winners and Losers
(
Updated with final stock price movements
.)
NEW YORK (
) --
Bank of America
(BAC) - Get Report
was among the winning stocks in the financial sector Wednesday even as New York Attorney General Andrew Cuomo threatened the bank over its acquisition of
Merrill Lynch
.
Cuomo is threatening to file charges against BofA because the bank knew about Merrill's escalating losses but didn't provide shareholders with information ahead of a vote to approve the deal. The bank's management also didn't disclose a $2 billion goodwill writedown on subprime investments ahead of the vote.
was sent a letter Tuesday by David Markowitz, the chief of Cuomo's investor-protection bureau, who demanded more information about conversations regarding acquisition of Merrill Lynch which bank officials have deemed privileged.
In his letter, Markowitz demanded that BofA provide more information or face charges "without giving credit to the advice of counsel defenses that Bank of America has not permitted us to test." Cuomo's office also takes issue with BofA's allowing Merrill to distribute bonuses on an accelerated basis, while the firm was facing escalating losses and was about to accept another $20 billion in government aid.
BofA shares ticked higher by two cents, or 0.1%, to close at $17.04. Among other bank stocks,
Citigroup
(C) - Get Report
slid 0.4%, while
JPMorgan Chase
(JPM) - Get Report
rose 0.8%,
Goldman Sachs
(GS) - Get Report
gained 1.8% and
Wells Fargo
(WFC) - Get Report
added 2.6%.
In other bank news,
The Financial Times
reported that a study by
says that the global regulatory overhaul will likely cut into long-term profitability at U.S. and European investment banks by nearly a third, which could lead to bonus reductions and staff cuts.
Meanwhile,
NYSE Euronext
(NYX)
said it has agreed to sell a "significant" equity stake in its
unit to seven Wall Street firms, including BofA, Citigroup, Goldman Sachs,
Barclays
(BCS) - Get Report
,
Citadel Securities
,
UBS
(UBS) - Get Report
and
TD Ameritrade
(AMTD) - Get Report
.
UBS shares were under pressure after Citigroup analysts said that the Swiss bank may not attract net new client investments until 2011. "Assets under management attrition relating to the unforced adviser departures is expected to carry over in the first half of 2010," Citi analysts said in a research note. "Combined with the envisaged offshore outflows, a return to positive net new money might therefore not occur until 2011."
UBS lost 18 cents, or 1%, to close at $18.26.
Shares of
E*Trade Financial
(ETFC) - Get Report
were little changed despite news that Chairman and CEO Donald Layton will step down from both positions by the end of 2009 when his contract expires. "Now that our major recapitalization is complete and the online brokerage business is growing again, I have accomplished what was needed for me to end my time as CEO on schedule," Layton said in a statement.
E*Trade shares tacked on a penny to close at $1.66.
In other analyst moves, Rochdale Securities analyst Dick Bove initiated coverage of
Fifth Third Bancorp
(FITB) - Get Report
with a neutral rating and a price target of $11, saying the company has been "rebuilt on a sounder base," but it is still "unlikely to show a profit until 2011."
Bove said that Fifth Third should see a full-year profit of 86 cents a share and that his 2010 estimate is for a loss of 11 cents a share. In 2011, Bove estimates Fifth Third should notch a profit of 46 cents a share. Fifth Third shares rebounded from early losses to rise two cents, or 0.2%, to $10.55.
Elsewhere,
Capital One Financial
(COF) - Get Report
rose 5.7% to end at $37.47 after Citigroup analysts upgrade the stock to buy from hold, citing stabilization of the credit-card issuer sector. Citi also raised the stock price target for Capital One to $44 from $28.
Citi analysts also bumped its rating for
MasterCard
(MA) - Get Report
to hold from sell. Shares finished up 1.4% to $210.31.
-- Written by Robert Holmes in New York
.
