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Updated with CIT Group news, new stock prices




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was among the losers of the financial sector Wednesday as bank stocks tumbled after a disappointing read on new-home sales.

Citigroup was down 17 cents, or 4%, to $4.10, making it one of the worst performing bank stocks, after the Commerce Department said

new-home sales

unexpectedly fell 3.6% in September to 402,000, likely reflecting the looming deadline of the first-time buyer tax credit on Nov. 30.

Ian Shepherdson, chief economist with High Frequency Economics, notes that new-home sales are captured at the point of contract signing, not closing, "so sales are trailing off now as people start to run out of time to close sales before the deadline."

In related news, the Mortgage Bankers Association said mortgage loan application volume fell by 12.3% on a seasonally adjusted basis last week from one week earlier. On an unadjusted basis, the Index decreased 2.8% compared with the previous week, which included the Columbus Day holiday.

Among other bank stocks trading lower Wednesday,

Wells Fargo

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fell by 2.5% to $27.69,

Bank of America

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lost 2.2% to $15.11 and

JPMorgan Chase

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slipped 2% to $43.01.


was also trading lower on reports that the search for a candidate to replace outgoing CEO Ken Lewis has turned up few outsiders.

The Wall Street Journal

reported that a board committee had hoped to pick a successor to outgoing CEO Ken Lewis in time for the bank's board to vote on the choice Wednesday but indicated it needs more time.

The search for a new CEO has slowed as directors sift through outside candidates that are in short supply, the report said, citing people familiar with the process.

In a separate report, the


reported that Treasury Department pay czar Kenneth Feinberg substantially increased regular salaries employees and executives working at the seven companies under his review, including BofA, Citigroup,

General Motors


American International Group

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. Feinberg is scheduled to speak Wednesday before the House Committee on Oversight and Government Reform.



report comes roughly a week after Feinberg announced sharp cuts in total compensation at the finance and auto companies under his control. According to the


analysis of government data, employees working at the companies under Feinberg's review will earn much less this year than in 2008, but he also adjusted base salaries for the bulk of those employees, in some cases boosting them by hundreds of thousands of dollars.



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was among the few financial winners of the day after the company reported fiscal fourth-quarter adjusted earnings of $552 million, or 74 cents a share, beating analysts' estimates by two cents. Revenue rose 10% from a year earlier to $1.9 billion, also topping the Thomson Reuters consensus target. Visa shares were rising 4.2% to $77.02.

In other earnings news,

E*Trade Financial

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late Tuesday posted a third-quarter loss of $832 million, or 66 cents a share, widening from the year-ago loss. Excluding items, E*Trade said it has a loss of a nickel a share, which was better than the Thomson Reuters average estimate for a loss of 6 cents a share. Shares were lately down 7 cents, or 4.5%, to $1.50.


CIT Group

shares surged after the embattled lender said that it has expanded its current $3 billion senior secured credit facility by an additional $4.5 billion. The new $4.5 billion tranche is being provided by a diverse group of lenders, including many of its bondholders, and will be secured by substantially the same assets as the existing $3 billion tranche and any additional collateral that becomes available as a result of its refinancing of certain existing secured credit facilities.

CIT Group shares were lately up 13 cents, or 13.5%, to $1.09.

Among analyst actions, Fox-Pitt Kelton analyst Edward Ditmire upgraded

Nasdaq OMX Group


shares to outperform from in line, arguing that the stock is "cheap after dramatic underperformance in '09." The firm said that a rebounding equity share will catalyze both earnings-per-share growth and valuation gains. Despite the upgrade, shares were lately down 1.1% to $18.41.

-- Written by Robert Holmes in New York


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