Bank stocks fell Monday in light trading.
The KBW Bank Index fell 1.22%.
Theodore Kovaleff, an analyst at Granta Capital Group LLC in New York, said many investors are likely selling bank stocks this week to lock in tax losses on stock sales for the year. Investors can carry forward losses for up to eight years to offset realized gains in later years.
According to Mr. Kovaleff, investors are likely concerned about who will get taxed more in 2009: those making above $250,000 a year or those making above three other potential thresholds mentioned in President-elect Barack Obama's campaign this fall, including $100,000.
"If you are in any one of those categories, you are now wondering whether it would be better to take your losses in 2008 or wait until next year," he said.
The broader markets were also off Monday. The Dow Jones industrial average fell 0.37%, and the Standard & Poor's 500 fell 0.39%.
Citigroup Inc. fell 2.4%. Reuters reported Monday that the New York company is providing $800 million of capital to its Citibank Korea; 60% of the funds will be used to issue shares, and the rest will be used to cover subordinated debt.
UCBH Holdings Inc. fell for most of the day but rose in late afternoon trading to close up 1.2%. Joseph Gladue, an analyst at B. Riley & Co. LLC, downgraded the San Francisco company's stock Monday to "neutral," from "buy," in response to a pair of capital injections — $298.7 million from the Treasury Department's Capital Purchase Program and $29.9 million from China Minsheng Banking Corp. Ltd., its second planned investment in UCBH.
Other gainers included Wells Fargo & Co., which rose 1.2%; SunTrust Banks Inc., which rose 0.3%; and PacWest Bancorp, which increased 0.5%.
The decliners included Bank of America Corp., which fell 3.1%; Regions Financial Corp., which fell 3.6%; and Zions Bancorp., which fell 2.6%.