Stock Market Plunges, But Banks Merely Dip
NEW YORK -- Bank stocks fell only slightly Friday in spite of a wide selloff in the market.American Banker's index of the 50 largest banks fell 0.47%, and its index of 225 banks fell 0.46%, as the Dow Jones industrial average plummeted 2.28%, to 9,862.12.
Economic data may have spooked some investors about rising interest rates. The gross domestic product's annual rate of growth was revised to an unexpectedly high 6.9% for the fourth quarter, from 5.8%, according to the Commerce Department. (See story on page 4.)
However, Scott Brown, chief economist at Raymond James & Associates of St. Petersburg, Fla., said investors' channeling of money into technology stocks was a greater factor in bank stocks' decline.
"The market has become more bizarre this year," said Mr. Brown. "People are treating companies that are making money as if they are toxic waste, and treating companies that have no earnings like gold."
Some bank stocks kept their heads above water. They included Bank of New York Corp., up $1.125, or 3.53%, to $33; Mellon, up 62.5 cents, or 2.17%, to $29.375; and Bank One Corp., up 25 cents, or 1.02%, to $24.8125.
"Obviously, there are some stocks" that investors are interested in, said Nancy Bush, an analyst at Prudential Securities. "But I don't have a lot of faith that this is the signal that something better is coming."
Home Resale Plunge Is Steepest in 5 Years
WASHINGTON - Home resales dropped faster in January than at any other time in almost five years, a survey showed.Rising mortgage rates damped demand across the nation.
Resales fell 10.7%, to an annual rate of 4.59 million, the National Association of Realtors said Friday. That was the biggest drop since a 12.5% plunge in April 1995. Analysts had been expecting a 0.4% decline.
Resales also fell in December, by 0.2%, to an annual rate of 5.06 million. That decline was originally estimated at 1.4%.
- Bloomberg News
First Data Chops 400 From Its Work Force
OMAHA - First Data Corp. said last week that it had eliminated 400 jobs in an effort to reduce expenses.Most of the layoffs were at First Data Resources Inc., the company's card processing division in Omaha. There 325 positions were eliminated, most of them management and professional.
"We did this as an effort to lower costs, streamline operations, and to help make us more competitive," said Peter Ziverts, a spokesman. "It's an intensely competitive marketplace."
First Data laid off 105 employees in January in its plastics division.
The credit card processor said that all of the people who lost their jobs will receive severance pay, and that it is organizing a job fair to help terminated employees find new positions at other companies.
- Miriam Kreinin Souccar