Bank stocks and the broader markets fluctuated Monday, the volatility occurring in light trading ahead of Tuesday's presidential election.
The KBW Bank Index rose 0.63%; the Dow Jones industrial average fell 0.06%; and the Standard & Poor's 500 index fell 0.25%.
"People are really curious as to what tomorrow is going to bring, so we're seeing very light volume, and it doesn't take a lot of these stocks going one way or another" to move the market appreciably, Tim Curran, a bank stock trader at Regions Financial Corp.'s Morgan Keegan & Co. Inc., said in an interview Monday.
On the top of the ballot is the choice of a U.S. president, and though polls have varied widely, many have tightened as the election grew closer.
Investors largely ignored an early morning report Monday by the Institute for Supply Management that its index of manufacturing activity fell to 38.9 in October, from 43.5 in September. Economists on average had expected a reading of 41.5.
However, the broader markets fell in the afternoon after General Motors Corp. and Ford Motor Co. announced that their October U.S. auto sales fell 45% and 30%, respectively. By day's end, however, the broader markets had nearly regained their losses.
U.S. Bancorp rose 1.6% Monday. The Minneapolis company said that it plans to sell $6.6 billion of preferred stock and warrants to the federal government as part of the Treasury Department's Capital Purchase Program. Such an infusion in the third quarter would have increased its pro forma Tier 1 ratio at Sept. 30 to about 11.4%, compared to the 8.5% it reported.
Midwest Banc Holdings Inc. rose 12.6%. The $3.6 billion-asset company in Melrose Park, Ill., reported that it would sell $85.5 million of preferred stock to the Treasury. In addition, Midwest plans to issue warrants to the government, letting it buy up to $12.8 million of common shares.
National City Corp. fell 6.3%. The Cleveland company said Monday that Peter E. Raskind, its chairman, president, and chief executive, would leave after PNC Financial Services Group Inc. in Pittsburgh closes its purchase of Nat City.
On Oct. 24, when the deal was announced, the two companies said Mr. Raskind would become a vice chairman once PNC completed the purchase and would help guide the integration. In a press release Monday, Mr. Raskind, 51, gave no reason why he had opted to leave once the deal closes, saying only that it had been "an honor and a privilege to lead" the Cleveland company.
The acquisition is expected to close by yearend. PNC stock rose 2.6% on Monday.
Fifth Third Bancorp rose 6% Monday as the Cincinnati company assumed all $254 million in deposits from Freedom Bank in Bradenton, Fla., after the Federal Deposit Insurance Corp. closed its doors Friday. Freedom is the 17th bank to fail this year.
Other gainers included Citigroup Inc., up 2.5%; Regions Financial Corp., 6.1%; and SunTrust Banks Inc., 0.3%. Other decliners included Bank of America Corp., off 2.3%; JPMorgan Chase & Co., 1.3%; and Wells Fargo & Co., 0.7%.