VOL. 123 | NO. 231 | Tuesday, November 25, 2008
Sector Snap: Regional Banks
CHARLOTTE, N.C. (AP) - Shares of regional banks rose Monday as investors focused on the government's plan to bail out Citigroup Inc.
The KBW Bank Index, which includes 24 national and regional banks, rose 11.6 percent in afternoon trading to 41.18.
Shares of U.S. Bancorp rose as a Stifel, Nicolaus & Co. analyst upgraded the Minneapolis-based bank's shares to "Hold" from "Sell," noting the recent sell off of the company's shares.
U.S. Bancorp shares gained $1.97, or 8.7 percent, to $24.50 in afternoon trading.
Analyst Christopher Mutascio said the upgrade was not because of the bank's decision on Friday to acquire the deposits of Downey Savings and Loan Association and PFF Bank & Trust, two thrifts that were shut down by the Federal Deposit Insurance Corp.
Federal regulators on Friday closed the two big thrifts based in Southern California, saying they fell victim to the acute distress in the housing market in that state.
"These acquisitions are not as attractive as they may seem at first blush and are less attractive than some of the more recent government-assisted deals due to the high concentration of certificates of deposit of the failed institutions U.S. Bancorp is acquiring," Mustascio wrote in a research note to clients.
Other regional banks' shares also climbed Monday as the financial services sector saw a broad uptick in the wake of the Citigroup bailout.
Late Sunday, the Treasury Department, the Federal Reserve and the FDIC agreed to plow $20 billion into Citigroup and shoulder possibly hundreds of billions of dollars in losses at the New York-based bank.
Regulators hope the dramatic action will bolster badly shaken confidence in the nation's financial system, facing the worst global crisis since the 1930s.
Among regional banks, shares of PNC Financial Services Group Inc. climbed $4.41, or 10 percent, to $48.10.
Shares of Regions Financial Corp. gained 82 cents, or 10.3 percent, to $8.78; BB&T Corp. rose $1.55, or 6.4 percent, to $26.26; Comerica Inc. rose $1.23, or 7.2 percent, to $18.36, and KeyCorp gained $1.53, or 24.2 percent, to $7.80.
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