Shares of MasterCard Inc. fell nearly 10% Friday, despite strong fourth-quarter earnings from the Purchase, N.Y., credit card issuer.
The stock's drop, the biggest since MasterCard went public in May, came after it said on an earnings conference call that it does not plan to increase prices this year.
The company swung to a profit of $41 million, or 31 cents a share, when adjusted for several one-time items, including litigation expenses and charitable contributions. Earnings per share beat the average analyst estimate by 14 cents, according to Thomson Financial.
MasterCard also said that changes in its pricing structure last year helped expand its operating margin by 2.9 percentage points, to 19.5%, but that the absence of a price increase this year might freeze its margin.
Shares of Sterling Bancorp of New York fell 2.5% after the company reported fourth-quarter operating earnings of 20 cents a share, or 3 cents below the average of analysts' estimates, according to Thomson Financial. Analysts cited a weaker net interest margin and higher expenses for the stock's decline.
New Century Financial Corp. shares fell 5.3% while trading at more than 16 times their average volume. Investors filed several class actions Friday, two days after the Irvine, Calif., company announced that the credit quality in its mortgage portfolio was worsening at a quicker pace than expected.
Also, Standard & Poor's Corp. cut New Century's credit rating to BB-minus, from BB. The downgrade pushed the credit farther into junk status.
The stock's drop Friday compounded a 36.2% drop Thursday, after New Century disclosed the problems with its credit quality.
The prolonged slide dragged down some other California mortgage companies, including FirstFed Financial Corp. of Santa Monica, which fell 6.3%, and Downey Financial Corp. in Newport Beach, which fell 3.7%.
Also, Countrywide Financial Corp. dipped 3.2%, even though the Calabasas, Calif., company reported that its January mortgage fundings rose 13% from a year earlier, to $37.1 billion.
The American Banker index of 225 bank stocks fell 1.36%, and the thrift index declined 1.02%. For the week, the bank index sank 1.1%, while the thrift index declined 2.32%.
The Standard & Poor's 500 decreased 0.71% Friday. The Dow Jones industrial average slipped 0.45%.
Nelnet Inc. rose 3.3% after the Lincoln, Neb., education lender said Stephen F. Butterfield, 53, plans to step down in May as its co-chief executive, but will remain vice chairman. The stock rose even though Nelnet reported a fourth-quarter loss of $7.3 million, or 14 cents a share, versus a profit of $42.7 million, or 79 cents a share, a year earlier.
Joe Gladue, an analyst with Cohen & Co., downgraded Vineyard National Bancorp's stock Friday to "hold," from "buy," because of valuation. Shares of the Corona, Calif., company slid 2.7%.
Other decliners included Provident New York Bancorp in Montebello, which dropped 3%, and Ocwen Financial Corp. of West Palm Beach, Fla., which fell 2.6%
The gainers included Doral Financial Corp. of San Juan, Puerto Rico, which rose 1.9%, and Alabama National Bancorp. in Birmingham, which rose 1.8%.