Bank Stocks Buried by Weak Housing Data

NEW YORK (TheStreet) -- Stocks of large-cap U.S. banks were hit hard on Wednesday, following the release of more disappointing housing market data.

The Census Bureau and the Department of Housing and Urban Development said housing starts in the United States during fell a seasonally adjusted annualized rate of 880,000. That's a 16% drop from December's annual pace of 1,048,000, and 2% below the pace of 898,000 in January 2013.

Economists polled by Thomson Reuters on average estimated the January rate for housing starts would come in at 950,000.

Those figures followed a similarly downbeat report on Tuesday from the National Association of Homebuilders. The NAHB/Wells Fargo National Housing Market Index fell to a preliminary reading of 46 for February from 56 in January. That was the biggest drop over the 30-year history of the index.

The NAHB attributed the February decline to severe weather, as well as shortages of labor and available building lots. "As shortages become more severe, builders are faced with the possibilities that they will not be able to build up their exceptionally low inventories in anticipation of the spring selling season," the NAHB said.

The Dow Jones Industrial Average was down 0.6%, while the S&P 500 pulled back 0.7% and the NASDAQ Composite gave up 0.8%.  The KBW Bank Index (I:BKX) was down 2% to 67.37, with all 24 component stocks ending with declines.

Big banks with stocks sliding more than 2.5% included Regions Financial (RF) of Birmingham, Ala., which closed at $10.10, and Zions Bancorporation (ZION) of Salt Lake City, closing at $30.12.  Large-cap banks seeing shares decline by more than 2% included Citigroup (C); closing at $48.19; Morgan Stanley (MS), at $28.06; JPMorgan Chase (JPM), at $57.26; KeyCorp (KEY) of Cleveland, at $12.64 and PNC Financial Services Group (PNC) of Pittsburgh, which closed at $79.67.

If you liked this article you might like

How to Get Rich Using Warren Buffett's Favorite Stock Market Indicators

How to Make Your Life Successful Just Like Billionaire Warren Buffett

With the Fed, It's Different This Time

China's Banks Halt Business With North Korea Per United Nations Sanctions

How to Live Just Like Billionaire Warren Buffett