|More on Citi Volcker Rule: Impact on Citi|
NEW YORK ( TheStreet) -- Citigroup ( C) shares closed above $4 on Friday on lower volume. Citigroup shares closed at $4.04, up 7 cents. Volume was 418,333,755 shares, a little more than half of the average volume of 829,722,000. Citigroup's stock is up 20% year to date, but far below the roughly 50% upturn in the stock from earlier this year. Trading volume in Citigroup has lessened in recent weeks as market volatility calms, but volume particularly fell this month due to the U.S. Treasury halting share sales of Citigroup for the two weeks prior to the bank's second quarter-earnings release on July 16. Citigroup's three-month trading average is 829 million. Citigroup's average daily trading volume from July 1 through Thursday was approximately 540 million shares. The stake is the result of the conversion of preferred stock issued as part of Citigroup's government bailout being converted to common shares in 2009. Treasury converted the preferred stock to common at a price of $3.25 a share. So far, the U.S. Treasury has sold roughly 2.6 billion shares of Citigroup's common stock at an average price per share of $4.03. It has received total gross proceeds of approximately $10.5 billion from the sales, it said in a release on July 1. With second-quarter earnings releases beginning next week with JPMorgan Chase ( JPM) on Thursday, analysts have been jockeying earnings expectations due to the weak capital markets scenario for the second quarter, despite improved credit quality. Sandler O'Neill & Partners was the latest equity research team to cut quarterly earnings estimates on the big money center banks on Friday. The note to clients included estimate revisions for Citigroup and JPMorgan. ( Bank of America ( BAC) earnings estimates were kept steady at 22 cents a share.) Sandler analyst Jeff Harte expects Citigroup to earn a profit of 5 cents a share for the quarter ending June 30 -- 2 cents lower than previous estimates, but equal to consensus estimates. Analysts on average expect Citigroup to earn a profit of 34 cents this year, according to Thomson Reuters. The revision includes reduced capital markets revenue and the inclusion of a $400 million U.K. banker bonus tax charge, somewhat offset by improved credit costs, according to the note. But Harte is also expecting "a sustained low level of capital markets activity levels in the seasonally slow third quarter" and lowered estimates for the second half of 2010 by 2 cents to a profit of 14 cents a share, the note says.
For similar reasons, the Sandler analysts were more pessimistic on JPMorgan Chase and cut quarterly earnings estimates by 25 cents to 59 cents a share and second half 2010 estimates by 6 cents to $1.71 a share. The average analyst estimate is for JPMorgan Chase to earn a profit of 72 cents a share for the second quarter and $3.12 a share for 2010, according to Thomson Reuters. JPMorgan Chase shares were rising 0.4% to $38.33. Bank of America shares were up 0.6% to $14.95. --Written by Laurie Kulikowski in New York.
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