U.S. bank, financial stocks off after rally last week
Shares of Citigroup Inc fell 2.5 percent on Monday amid a broad slide in financial stocks as investors took profits after last week’s rally.
Bank stocks were also hit by a report from veteran banks analyst Dick Bove at Rochdale Securities suggesting that in the short-term “a reaction to the recent move up in the stocks may develop.”
Citigroup shares slumped to $5.05 in premarket trading after Barron’s recommended investors take profits in the U.S. bank, whose shares have almost doubled in the last month.
Even banks that have been seen as the outperformers of the two-year-old financial crisis fell slightly. JPMorgan Chase & Co and Goldman Sachs were down 1.3 percent and 0.8 percent, respectively.
“There is a big question over the recent runs,” said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co in San Francisco. Investors are concerned that news in the sector did not justify the recent run-up, which may also have been helped by short-covering, he said.
Shares in other financial companies, including insurer American International Group Inc and the government-controlled mortgage companies Fannie Mae and Freddie Mac, also fell after rising sharply last week.
AIG shares were down 9 percent to $45.50 in premarket trading after climbing more than 50 percent last week, while Fannie shares fell 6 percent to $1.91 and Freddie shares slipped 8 percent to $2.25.
The KBW Banks Index has climbed 7 percent since the start of August.
(Reporting by Elinor Comlay, additional reporting by Edward Krudy; editing by John Wallace)
Filed under: economics by Forest