|More on Citi Cramer: Thoughts on Citigroup|
Citigroup shares fell after the Treasury Department said it has sold approximately 1.1 billion shares under its second trading plan. The Treasury received the Citigroup shares by converting preferred stock issued as part of the financial bailout into common stock.
To date, the Treasury said it has sold a total of approximately 2.6 billion shares of Citigroup common stock at an average price per share of $4.03 for total gross proceeds of approximately $10.5 billion. The Treasury Department said it still owns about 5.1 billion shares of Citigroup but will temporarily halt share sales until after Citigroup reports second-quarter earnings.
Citigroup shares were lately down 6 cents, or 1.6%, to $3.70. The stock has fallen 4% over the last month and more than 11.5% over the previous three months. Most other U.S. bank stocks traded mixed after Bank of America/Merrill Lynch analyst Guy Moszkowski cut estimates across the board ahead of second-quarter earnings on lower trading. Moszkowski said that trading volumes and volatility rose in the quarter, but that market values were lower. He added that client inactivity was reminiscent of the second half of 2009's fourth quarter. For Goldman Sachs ( GS), Moszkowski slashed his second-quarter earnings-per-share estimate to $1.76 from $3.57, nothing extremely tough year-over-year and quarter-over-quarter comparisons. Moszkowski lowered his second-quarter EPS target for Morgan Stanley ( MS) to 58 cents from 89 cents a share, citing lower trading and principal investments. Bank of America/Merrill Lynch's second-quarter EPS target for Citigroup was sliced in half to 2 cents a share, and the estimate for JPMorgan Chase's ( JPM) second quarter was reduced to 70 cents a share from 77 cents. Among those stocks mentioned, JPMorgan shares were off 2% to $35.83, while Morgan Stanley was flat at $23.21 and Goldman Sachs rose 1.6% to $133.31. Meanwhile, Bank of America ( BAC) was among Thursday's biggest decliners, falling 2.3% to $14.04. In other bank-related news, the House of Representatives on Wednesday passed a massive overhaul of financial regulations by a 237-to-192 vote that fell largely along party lines. Three Republicans voted for the bill, while nineteen Democrats voted against it. The Senate will vote on the compromised bill next, although that vote will be delayed until after the Independence Day holiday break. Elsewhere, American International Group ( AIG) CEO Robert Benmosche last week threatened to resign from the insurer unless Chairman Harvey Golub left, Bloomberg reports, citing two people familiar with the matter. After AIG's failure to sell its Asian unit to Prudential PLC ( PUK) for $35.5 billion, Benmosche said during a June 25 board meeting that he wanted more control over the divestiture, the report says. Golub reportedly was opposed the sale of AIA because even though it would yield more money that could be used to repay bailout funds, it was riskier, one person told Bloomberg. Shares of AIG were off 1.7% to $33.85. -- Written by Robert Holmes in Boston. Follow Robert Holmes on Twitter and become a fan of TheStreet.com on Facebook.