Updated with stock price moves
NEW YORK (
was among the winners of the financial sector Tuesday after the bank became the latest to announce it would repay government bailout funds.
late Monday said it would repay the government's $25 billion preferred equity investment after completing a stock offering, becoming the last of the major banks to repay the U.S. bailout from the height of the financial crisis. The announcement came hours after
said it would repay $20 billion to the U.S. government.
Following the bank's announcement, Keefe Bruyette & Woods analysts upgraded Wells Fargo to market perform from underperform and raised their price target to $28 from $24. Deutsche Bank upgraded the stock to buy from hold and raised its price target to $36 from $29.
Meanwhile, FBR Capital Markets reiterated the firm's underperform rating on Wells Faro shares, but raised its price target to $21 from $20, saying the repayment is a near-term positive, but valuation remains too rich given headwinds from elevated credit costs.
priced a $10.65 billion offering of 426 million shares of common stock at $25 a share. Wells Fargo shares were lately up 65 cents, or 2.6%, to $26.14.
In other bank news,
The Wall Street Journal
Bank of America
has suffered a setback in its search for a replacement for outgoing CEO Ken Lewis. Late Monday, the paper reported that Robert Kelly, CEO of
Bank of New York Mellon
would not leave to head up Bank of America.
With Kelly's decision to withdraw from consideration over compensation, the
said Bank of America's CEO search is focused on two internal candidates, Chief Risk Officer Gregory Curl or Brian Moynihan, president of consumer and small business banking, citing people familiar with the situation.
Bank of America shares were lately down 1.9% to $15.33.
Bank of America will also be among a handful of financial institutions reporting charge-off and delinquency data for November. Already,
said net charge-offs rose to 8.98% in November from 8.54% in October, while the total delinquency rate fell to 5.65% from 5.72% the month prior.
Capital One Financial
said charge-offs rose to 9.6% last month from 9.04% in October, while the delinquency rate increased to 5.87% from 5.72% in October.
Discover shares slipped 0.6% to $16.40, and Capital One fell 1.8% to $40.31. Citigroup,
and Bank of America will report credit card metrics later in the session.
Among analyst moves, UBS initiated coverage of several financial stocks with a neutral rating, including
Bank of Hawaii
. Each stock was trading lower, with Huntington leading the way down with a loss of 2.8%.
UBS also initiated coverage of
Marshall & Isley
with a sell rating. Of those names, Marshall & Isley slumped 4% while Synovus tacked on nearly 1%.
Elsewhere, Deutsche Bank upgraded shares of
to buy from hold and raised its stock price target to $32 from $27. Still, BB&T shares dipped 0.5% to $26.09.
Meanwhile, William Blair lowered fourth-quarter and 2010 full-year earnings for
, forecasting a more-pronounced slowdown in trading activity, particularly fixed income trading, than originally anticipated.
In other Goldman news,
reports that an institutional investor is suing the bank, claiming the firm is preparing to pay out improper bonuses. The lawsuit, filed with the New York Supreme Court by the Security Police and Fire Professionals of America Retirement Fund, accuses Goldman executives, including CEO Lloyd Blankfein, of "blindly" rewarding executives "for corporate performance that has absolutely nothing to do with the skill of the company's employees."
The lawsuit also states that Goldman is estimated to issue payouts in excess of $22 billion, the
report said. Goldman shares were down 1.6% to $163.45, and Morgan Stanley was falling 0.4% to $30.04.
-- Written by Robert Holmes in Boston
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