NEW YORK (
) -- Shares of
kept an ignominious streak intact on Tuesday, finishing lower amid broad weakness in the financial sector.
The stock lost 2% to close at $27.79 despite getting
to buy from hold at Deutsche Bank, which has a $34 price target on the shares and believes credit trends will improve in the bank's key markets later in 2010. Volume of 11.3 million was more than 30% above the issue's trailing three-month daily average of 8.1 million. The stock has now fallen in five straight sessions, and it's down 11.5% since reaching a 52-week high of $31.42 last week. Year to date, however, SunTrust shares have still appreciated nearly 27%.
The banks were weak on Tuesday as the market continued to wrestle with the prospect of sweeping regulatory reform. The Senate continues to work on a bill, and while party politics are predictably slowing progress, the general perception is that a vote is coming later this week, and that the bill on the table will be much tougher than most observers were expecting as recently as a month ago.
Moody's said Tuesday a reform bill that removes some guarantees of support for financial institutions, instead creating a resolution authority to unwind them, could be "detrimental to bondholders over time" and it listed SunTrust among the banks whose ratings benefit from support assumptions. The ratings agency said SunTrust's rating of A2 reflects a lift of two notches.
On the news front, SunTrust held its annual meeting Tuesday, declaring its regular quarterly divided of a penny per share and naming Thomas Watjen and William Linnenbringer to its board, among other housekeeping items.
Written by Michael Baron
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