Shares of PNC Financial Services Group Inc. of Pittsburgh were among the top gainers among financial services stocks Monday on news reports that BlackRock Inc., the investment manager majority-owned by PNC, is looking to transfer a stake to Merrill Lynch & Co. Inc.
News reports Monday morning had Merrill trading its investment management unit for a 49% stake in BlackRock. After the deal, PNC's 70% stake in BlackRock would be cut in half.
Shares of PNC rose 3.1%, and the trading volume was almost three times its average. Shares of BlackRock rose 8%, and Merrill's shares gained 1.4%.
PNC, Merrill, and BlackRock would not discuss the reports.
Richard Bove, an analyst with Punk, Ziegel & Co., wrote in a research note that if a deal between BlackRock and Merrill were struck, "PNC is the biggest winner." Though PNC's share in BlackRock would be cut in half, BlackRock's annual contribution to PNC's earnings would increase 39%, Mr. Bove wrote.
The American Banker index of 225 bank stocks declined 1.09% Monday, and the thrift index fell 0.56%. The Standard & Poor's 500 fell 0.33%.
Other bank stocks that gained on Monday included First Marblehead Corp. of Boston, which rose 3.2%, and FirstMerit Corp. of Akron, which gained 1.4%.
The biggest decliners among financial services stocks included two Los Angeles companies focused on serving Korean-American communities: Nara Bancorp Inc., which fell 6.2%, and Hanmi Financial Corp., which fell 2.4%.
Two Puerto Rican banking companies also dropped; First BanCorp fell 3%, and R&G Financial Corp. fell 2.5%.
