NEW YORK (TheStreet) -- After selling off violently on Tuesday, U.S. stocks ended up slightly lower on Wednesday. Investors were squarely focused on financial stocks after the market close once the stress tests -- formally the Comprehensive Capital Analysis and Review results -- were released.
The Federal ReserverejectedDeutsche Bank (DB) - Get Report and Banco Santander (SAN) - Get Report. The Fed is requiring Bank of America (BAC) - Get Report to resubmit its capital allocation plan but did approve the bank's proposed $4 billion buyback plan.
The news from Bank of America is somewhat disappointing, Karen Finerman, president of Metropolitan Capital Advisors, said on CNBC's "Fast Money" TV show. While it's nice to see the $4 billion buyback, the situation there isn't improving as quickly as she had hoped. Instead, Citigroup (C) - Get Report now looks more attractive.
Citigroup boosted its dividend to 5 cents per share from 1 cent and announced a $7.8 billion buyback program.
Stick with Citigroup, said Tim Seymour, managing partner of Triogem Asset Management. Its capital return is nice but the company will also benefit from a rise in interest rates. The stock has a low valuation and management continues to lower the risk within its businesses, he said.
If shares of Banco Santander go lower on these disappointing results it may present a buying opportunity, he added. The company has an attractive dividend and its European exposure to promising.
Investors should stick with the "cleaner" banks such as Wells Fargo (WFC) - Get Report and U.S. Bancorp (USB) - Get Report, said Guy Adami, managing director of stockmonster.com. "Slow and steady wins the race," he added. These banks tend to have slower but less volatile growth while also avoiding litigation with the government.
"I'm not buying any of them," said Brian Kelly, founder of Brian Kelly Capital. He thinks the U.S. economy is not growing as fast as investors seem to think and, therefore, rates seem unlikely to move higher in the near term, which will negatively impact the banks.
Citigroup is the clear winner from the results, said Jeff Harte, principal at Sandler O'Neill & Partners. He was "pleasantly surprised" by the bank's buyback and feels it is putting some of its previous issues behind it. He has a buy rating on the stock with a $60 price target.
As for JPMorgan Chase (JPM) - Get Report, the bank announced a stock buyback of $6.4 billion, smaller than last year's $6.5 billion. While the buyback is nice, Harte says investors are likely disappointed by the smaller size. Morgan Stanley's (MS) - Get Report $3 billion buyback is impressive, he added.
Alex Gauna, senior analyst at JMP Securities, has an underperform rating on Intel (INTC) - Get Report with a $30 price target, reasoning that Wednesday's news Intel will be getting its chips into Apple's (AAPL) - Get Report iPhones for its international business isn't that big a deal.
Intel would replace Qualcomm (QCOM) - Get Report in Apple's international iPhones. It will take roughly six to seven quarters for the move to happen because it's planned for 2016, Gauna said. However, the impact is likely to be limited. He's also bearish on Intel's data centers. Instead, he likesSkyworks Solutions (SWKS) - Get Report, Knowles (KN) - Get Report and Universal Display (OLED) - Get Report.
Shares of Qualcomm are cheap, but there's too much news coming from the company. Investors should wait for clarity after the company's next earnings report before getting long, Adami said.
For their final trades, Seymour is buying Citigroup and Kelly is buying ProShares UltraShort Yen ETF (YCS) - Get Report. Adami said to buy Tenet Healthcare (THC) - Get Report and Finerman is a buyer of Children's Place Retail Stores (PLCE) - Get Report if the stock sells off on earnings.