Rubin's downgrade to a "Sell" rating seems particularly harsh, because Goldman Sachs ( GS) and JPMorgan Chase structured Johnson & Johnson's huge acquisition of Synthes in June.

Turning back to financials, some day traders may have been scratching their heads earlier on Tuesday when trades of the Financial Select Sector SPDR ( XLF) were apparently misquoted, according to a MarketWatch report.

The reported quoted Eric Hunsader -- founder of market research firm Nanex -- as saying that an XLF trade that was apparently mispriced at 16.4940 "should probably be 16.0494," and that "another example was 16.4540 instead of 16.0454."

The Financial Select Sector SPDR ended the trading session at $15.94, down 1% for the session.

The KBW Bank Index ( I:BKX) was down 1% to close at 50.85, with all but two of the 24 index components showing declines for the day.

In his firm's third-quarter bank earnings preview, Oppenheimer analyst Terry McEvoy said that "the general upward move in the equity markets, more favorable housing trends and a resurgence in acquisition activity late in the quarter contributed to the solid performance" of financial stocks, but "with earnings beginning to flatten out, near-term loan growth expectations overly aggressive, and the negative margin trajectory, we have a more balanced view of the regional banks today with higher mortgage and asset management revenue and a drop in environmental costs providing some near-term relief."

With steadily improving credit quality, most banks have seen their earnings boosted over the past two years through the continued release of loan loss reserves. McEvoy said that "consensus estimates show the top 100 regional and small banks have finally hit their earnings wall as the benefits of lower provisions for reserves have now passed. Earnings for these banks are expected to be flat from the prior quarter and show a 5.7% increase from 3Q11."

Wells Fargo


Wells Fargo's shares have now returned 30% year-to-date, following a 10% decline during 2011.

The shares trade for 2.1 times tangible book value, according to Thomson Reuters Bank Insight, and for 10 times the consensus 2013 earnings estimate of $3.67, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $3.33.

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