) --

Capital One Financial

(COF) - Get Report

was the loser among major U.S. banks on Monday, with shares sliding over 2% to close at $53.68.


S&P 500


pulled back 0.5% from its record close on Thursday, after the Institute for Supply Management said its manufacturing index for March declined to 51.3 from 54.2 in February. Economists polled by

Thomson Reuters

had expected the ISM manufacturing index for March to remain at 54.2. A reading above 50 indicates expansion.

On a more positive note, the U.S. Census Bureau said Monday construction spending during February increased by 1.2% to a seasonally adjusted annual rate of $885.1 billion, from the revised January estimate of $874.8 billion. In February 2012, the annual construction spending rate was $820.7 billion.

"Hardly a week passes without further indicators that the Fed's massive quantitative easing (QE) balance sheet expansion program is working overtime to stimulate the economy," according to UBS economist Maury Harris, who discussed the

Federal Reserve's

stimulative policies in a report on Monday.

"The Fed's $85 billion per month in balance sheet expansion is a dozen times larger than the much heralded $85 billion per annum Federal spending sequester," Harris wrote. The economist continued his cheerful theme, adding that "despite persistent worries that the expiration of the temporary Social Security payroll tax cut would dog consumer spending, recent survey data indicate just a third of workers cutting spending in response and about half not even noticing it yet."


KBW Bank Index


was down 1% to close at 55.82, with all but two of the 24 index components seeing declines for the session.

Capital One

Shares of Capital One are down 7.3% this year, following a 36% return during 2012. The shares trade for 1.3 times tangible book value, according to

Thomson Reuters Bank Insight

, and for 8.0 times the consensus 2014 EPS estimate of $6.68, among analysts polled by

Thomson Reuters

. The consensus 2013 EPS estimate is $6.40.

Capital One is the only one of the 24 components of the KBW Bank Index to see a negative return this year. The company in January reported a

disappointing fourth quarter

, with a sequential earnings decline that CFO Gary Perlin blamed on "seasonal patterns." However, the company provided guidance saying it expected "average quarterly revenue levels in 2013 to be consistent with the fourth quarter of 2012, as a modest decline in earning assets will be offset by a steady to slightly higher net interest margin."

Then in February, Capital One expanded upon the theme of lower domestic credit card balances, announcing an agreement to

sell its $7 billion portfolio


Best Buy

(BBY) - Get Report

credit cards to


(C) - Get Report


But Capital One could well be an excellent defensive play for investors right now, because it trades very cheaply to forward earnings, and because its core credit card offerings offer strong earnings potential. The stock has the lowest forward price-to-earnings ratio of the 24 components of the KBW Bank Index.

Interested in more on U.S. Bancorp? See TheStreet Ratings' report card for this stock.

-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.