Bank stocks remained in negative territory Tuesday, dampened by recent capital raising and investor anxiety about the Obama administration's pending regulatory overhaul.
The KBW Bank Index fell 2.42%, after declining 2.54% on Monday.
Theodore Kovaleff, the bank and thrift analyst at Broad Street Securities in Plantation, Fla., said that the recent rally in bank stocks has been tempered by the numerous capital raisings by companies participating in the Troubled Asset Relief Program.
"There has been a devaluation of shares as a result of the forced issuance of new shares at a price that is often below tangible book," he said. "That lowers their book value, and investors who value stocks based on price to book, are ratcheting down their expectations."
Kovaleff said that many investors are also concerned about the administration's prescription for revamping oversight, which is expected to be unveiled Wednesday.
JPMorgan Chase & Co. fell 1.5%, Bank of America Corp. 4.5%, Wells Fargo & Co. 1.3%, PNC Financial Services Group Inc. 2.9% and Citigroup Inc. 12 cents a share, to $3.25.
U.S. Bancorp rose 0.2%.
Among the regionals, SunTrust Banks Inc. was off 2.9%, Zions Bancorp. 7.7%, Comerica Inc. 2.9% and Huntington Banschares Inc. 22 cents, to $4.30 a share.
The Dow Jones industrial average fell 1.25%, and the Standard & Poor's 500 index 1.27%.
