Bank stocks fluctuated Monday as worries persisted about whether Congress would nationalize banks.
The KBW Bank Index rose in the morning but fell in the afternoon to close down 3.02%.
"Investors are still very confused about where the value is in bank stocks, because there is so little visibility on the future," said Christopher Whalen, the managing director at Lord, Whalen LLC's Institutional Risk Analytics.
Investors may have been encouraged by House Speaker Nancy Pelosi's comments Sunday on ABC's "This Week," when she said she would shy away from nationalizing banks, Mr. Whalen said. However, Ms. Pelosi also said that if the government increased its investment in banks, it could require more equity in return.
"For the next couple of weeks Congress will be developing a plan, but I think investors focusing on politics is not very productive, because it is such an unknown," he said.
The Dow Jones industrial average rose 0.48%, and the Standard & Poor's 500 rose 0.56%.
The National Association of Realtors reported Monday that sales of existing homes unexpectedly rose 6.5% last month from November but fell 3.5% from a year earlier.
Bank of Hawaii Corp.'s shares fell 0.8%. The $10.8 billion-asset Honolulu company said Monday that fourth-quarter net income fell 4% from a year earlier, to $39.3 million, or 82 cents a share, missing the average analyst estimate polled by Thomson Reuters by 5 cents. Its provision more than tripled from a year earlier, to $18.6 million.
PrivateBancorp Inc. fell 22.2%. The $10 billion-asset Chicago company said Monday that it lost $462.2 million, or $1.96 a share, because of a spike in its provision. Analysts on average had expected a loss of 14 cents a share. In the fourth quarter of 2007, PrivateBancorp lost $15.3 million.
Bank of America Corp. fell 3.9%. Keith Horowitz, an analyst for Citigroup Inc., said Monday that he expects the Charlotte company to lose 10 cents a share this year. His previous forecast called for a profit of 25 cents.
Dow Jones reported that John Thain, the former Merrill Lynch & Co. Inc. chief executive who was ousted last week, defended his actions at the brokerage firm Monday but said he would reimburse B of A for renovations to his office.
Also Monday, B of A said it cut 1,900 jobs in London as part of its plan to cut 35,000 at the company.
Regions Financial Corp. fell 12%. Richard Bove, a Ladenburg Thalmann & Co. Inc. analyst, wrote in a research note that the Birmingham, Ala., company would likely cut its quarterly dividend 90%, to a penny, and post a loss for this year.
In the fourth quarter Regions lost $6.2 billion, mainly because of a $6 billion goodwill impairment charge to show that its banking unit is now worth less than its book value.
Wells Fargo & Co. fell 2.5%. The San Francisco company said Monday that it was extending its loan modification program to 478,000 at-risk mortgages inherited from Wachovia Corp.
Citigroup Inc. closed down 4%. The New York Post, citing sources close to the company, reported Monday that it is buying a $50 million corporate jet and trying to sell two of its older ones.
Sen. Carl Levin, D-Mich., told the Post that he had asked Timothy Geithner to stop the jet purchase once Mr. Geithner is confirmed as Treasury secretary.
Other decliners Monday included U.S. Bancorp, which fell 11.1%; Fifth Third Bancorp, which fell 7.6%; and SunTrust Banks Inc., which fell 9.8%.
Gainers included JPMorgan Chase & Co., which rose 0.9%; State Street Corp., which rose 5.6%; and UCBH Holdings Inc., which rose 9.2%.