Regional Banks Slide: Financial Losers

NEW YORK ( TheStreet) -- Regional bank stocks were weak on a slow Friday for trading activity, as is traditional heading into the long Labor Day weekend

First Niagara Financial Group ( FNFG) of Buffalo, N.Y., was the loser among large U.S banks, with shares down 1.5% to close at $10.10.

The KBW Bank Index ( I:BKX) was down 0.6% to close at 62.20, with all but two of the index components ending lower. Commerce Bancshares ( CBSH) of Kansas City, Mo., was down 2% close at $43.19. Index components seeing declines of 1% or more included Cullen/Frost Bankers ( CFR) of San Antonio, which closed at $70.83; KeyCorp ( KEY) of Cleveland, closing at $11.67; New York Community Bancorp ( NYCB), at $14.65, SunTrust ( STI) of Atlanta, at $32.02; and Zions Bancorporation ( ZION) of Salt Lake City, with shares closing at $27.97.

The Dow Jones Industrial Average and S&P 500 ( SPX.X) each ended with slight declines, while the NASDAQ Composite moved nearly 1% lower, as the United States continued to make a case for a military strike against Syria, and after two disappointing economic report were released.

Secretary of State John Kerry in a public statement used the words "we know" 16 times, when saying the U.S. government had detailed knowledge of recent chemical weapons use by forces loyal to Syrian president Bashar Assad. "We know that the regime has used those weapons multiple times this year, and has used them on a smaller scale but still it has used them against its own people, including not very far from where last Wednesday's attack happened."

The White House released an assessment of the Syrian government's use of chemical weapons on Aug, 21, and Kerry said 1,439 people were killed in the attack last week, including 426 children.

"As previous storms in history have gathered, when unspeakable crimes were within our power to stop them, we have been warned against the temptations of looking the other way," Kerry said. As President Obama continued considering whether or not to attack Syrian government forces, the British House of Commons voted against military action, while French President Francois Hollande expressed support for punishing Syria.

Economic Reports

The Bureau of Economic Analysis said consumer spending increased by 0.1% during July, down from an upwardly revised 0.6% in June. Economists polled by Thomson Reuters had expected consumer spending to increase by 0.3% during July. U.S. personal income also increased by 0.1% during July, down from 0.3% the previous month and short of the 0.2% expected by economists.

The final estimate on the University of Michigan Consumer Sentiment Index came in at 82.1, which was its lowest level in four months, although the number was up from the previous estimate of 80.0. The final estimate came in ahead of the 80.7 reading expected by economists.


-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.