Wednesday's Financial Winners & Losers
Financial stocks struggled to find their footing Wednesday as two of the major indices treaded water.
Recently, the
NYSE
Financial Sector Index added 0.2% at 8,829.68 with the help of names such as
Bear Stearns
(BSC)
, which
quelled some investor trepidation regarding its financial problems.
At a Merrill Lynch-sponsored conference, the broker said it had cut its exposure to the ravaged CDO (collateralized debt obligation) market by more than half since August to $884 million. Bear also projects a mortgage-securities-related writedown of $1.2 billion in the fourth quarter -- lingering vestiges of
mammoth subprime problems that surfaced this summer. Still, the shot of confidence seemed to outweigh, as shares pushed 6.8% higher at $107.71.
Merrill Lynch
(MER)
climbed, as well, after the
New York Post
reported that it had successfully tapped
NYSE Euronext
TheStreet Recommends
(NYX)
CEO John Thain
to replace Merrill's
recently ousted former Chief Stan O'Neal following the broker's
abominable third-quarter results. NYSE was expected to hold an emergency board meeting this afternoon.
Prior trading-floor rumors had Thain going either to Merrill or
Citigroup
(C) - Get Citigroup Inc. Report
, which also just
pushed out its CEO on the heels of a
plunging third-quarter profit. According to
Reuters
, Merrill denied prior reports that it had previously offered the top job to
Blackrock
(BLK) - Get BlackRock Inc. Report
CEO Larry Fink.
Merrill shares bounced 4.4% to $59.47, Citi gained 1.2%, and Blackrock was lately up 1.4% at $198.31. NYSE traded in and out of the red but, recently, it ticked up 0.9% to $87.72.
A battered
E*Trade
(ETFC) - Get E*TRADE Financial Corporation Report
, meanwhile, continued clawing its way back from Monday's
precipitous drop. An analyst with BMO Capital Markets called bankruptcy at the online broker "highly unlikely," per a
Reuters
report, following the firm's warning regarding the
shrinking value of its asset-backed securities.
In addition, CEO Mitch Caplan yesterday
canceled his appearance at the above-mentioned Merrill conference, which could indicate a forthcoming management shakeup. E*Trade shares were surging 73 cents, or 14.6%, to $5.73.
Charles Schwab
(SCHW) - Get Charles Schwab Corporation (The) Report
, another online broker, said October daily average trades and total client assets surged from last year by 29% and 24%, respectively. In that month, as well,
optionsXpress
undefined
reported daily average revenue trades soaring 64% year over year, and
Knight Capital
(NITE)
said the value of its average daily trades had more than doubled to $17.2 million. Shares were up 2.4% or more.
Elsewhere in positive territory,
HSBC
(HBC)
traded higher after saying that "excellent operating and financial performance" in Asia-Pacific and in the Middle East helped boost its third-quarter pretax profit vs. a year ago, even though the Britain-based bank also took a $3.4 billion loan-impairment hit in its U.S. Consumer Finance segment. Shares tacked on 0.9% to $89.58.
And
Greater Community Bancorp
(GFLS)
had one of the sector's biggest price gains today, rocketing 38.9% to $20, after agreeing to sell itself to
Oritani Financial
(ORIT) - Get Oritani Financial Corp. Report
for $21.40 a share. The $187 million stock-and-cash deal should close in the second calendar quarter of next year. Oritani slid 13.8%.
After climbing steadily for the past few days, the KBW Bank Index retreated 0.7% to 98.61, under pressure from the vast majority of its components. Two of these,
Bank of America
(BAC) - Get Bank of America Corporation Report
and
Marshall & Ilsley
(MI)
, dragged lower despite seemingly positive developments.
BofA got a Punk Ziegel upgrade to buy, which cited its investment in China Construction Bank, though this follows CFO Joe Price's warning yesterday that the bank could face
$3 billion in fourth-quarter writedowns. The Charlotte, N.C., bank's shares, which nonetheless rose substantially yesterday on the heels of that warning, today were pulling back 0.5%.
MI also lost ground even though the Milwaukee bank said it will repurchase $114 million of its shares from
Credit Suisse
on an accelerated basis under prior authorizations. Shares recently gave up 1% to $32.25.
Finally,
Northern Trust
(NTRS) - Get Northern Trust Corporation Report
was off 1.2% after saying that a pretax litigation expense of $50 million will slice 15 cents a share off its fourth-quarter bottom line. The Chicago-based firm said in a regulatory filing that, as a member bank of Visa U.S.A., it must share in the credit-card issuer's recent antitrust settlement with
American Express
(AXP) - Get American Express Company Report
. Northern Trust stock shed 97 cents to $79.24. AmEx was recently up 1.2%.
