Thursday's Financial Winners & Losers
Updated from 1:28 p.m. EST with new stock prices
A mixed bag of news left financial stocks little changed Thursday morning before the sector began to lose its strength later in the day, but some stocks -- such as
Morgan Stanley
(MS) - Get Morgan Stanley Report
-- were shoring up gains following Wednesday's devastating selloff.
Morgan announced that the value of its subprime-related exposures had dropped by $3.7 billion pretax since the beginning of its fiscal third quarter, and a few analysts cut their price targets on the firm in response. But shares found relief seeing as that figure is below the midpoint of a range from two analysts cited by
The Wall Street Journal
yesterday.
Those analysts -- from Fox-Pitt, Kelton and Deutsche Bank -- had pegged the number at $3 billion to $6 billion, according to the
Journal
. After taxes, said Morgan, the writedown should shrink fourth-quarter income by about $2.5 billion. Shares were tacking on 4.8% at $53.68 to recoup some of yesterday's substantial losses.
Elsewhere in positive territory, Bermuda insurer
Assured Guaranty
(AGO) - Get Assured Guaranty Ltd. Report
jumped 3% to $19.00 after saying it will repurchase up to 2 million of its shares, having completed its prior million-share authorization in the third quarter, and
Wells Fargo
TheStreet Recommends
(WFC) - Get Wells Fargo & Company Report
added another 75 million shares to its buyback program. Shares of the San Francisco bank ticked up 2.3% to $31.48.
Wells Fargo's gain lent support to the KBW Bank Index, and all of the above stocks are components of the
NYSE
Financial Sector Index, and the trackers climbed 1.2% and 0.2%, respectively.
Helping to weigh down the NYSE financial index, though, was insurance behemoth
American International Group
(AIG) - Get American International Group Inc. Report
. The New York firm said adjusted income
fell 13.2% from last year to $3.49 billion, or $1.35 a share -- far below the average analyst estimate for $1.62 a share, as per Thomson Financial. Shares slid 3.3% to $56.00.
In negative analyst calls, Lehman Brothers cut Bermuda insurer
Primus Guaranty
(PRS) - Get Prudential Financial Inc. 5.625% Junior Subordinated Notes due 2058 Report
to underweight, and Dutch bank
ING Group
(ING) - Get ING Group N.V. Report
got a Bear Stearns downgrade to peer perform from outperform. Shares of the firms were losing 13.2% and 0.9%, respectively.
And
Merrill Lynch
(MER)
was on another downturn after disclosing in its quarterly filing that
Securities and Exchange Commission
staff "initiated an inquiry into matters related to Merrill Lynch's subprime mortgage portfolio" a couple of weeks ago. The broker's exposure to such investments pressured it into a
huge third-quarter loss, as it recently reported, and ultimately led to the
ouster of CEO Stanley O'Neal.
