Bank stocks closed down again after a mixed trading session Thursday, as investors remained skittish about financial companies and the market in general.
The KBW Bank Index rose early in the day but fell in the afternoon to close down 0.36%.
Matthew Shields, a trader at FIG Partners LP, said bank stocks again showed their volatility.
"That trend is for the whole market, not just bank stocks, because of the uncertainty of the economy" and earnings reports scheduled for the next two months, Mr. Shields said.
Citigroup Inc. rose in the late afternoon to close up 0.1%. The New York company reached a deal Thursday with several Democratic senators not to oppose legislation that would let bankruptcy judges change mortgage terms to prevent foreclosures. Lawmakers plan to introduce the measure as part of President-elect Barack Obama's economic stimulus legislation.
Bank of America Corp. fell 1.2%. According to news reports, Greg Fleming, the president of Merrill Lynch & Co. Inc., is leaving now that the Charlotte company has completed its acquisition of his firm. Mr. Fleming is expected to join the faculty of Yale University.
Merrill did not return calls, and B of A referred questions to Merrill.
Comerica Inc. rose 0.1%. The $65.2 billion-asset Dallas company said Thursday in a Security and Exchange Commission filing that its Comerica Securities Inc. had finalized a settlement agreement with the Financial Industry Regulatory Authority to repurchase $10 million of auction-rate securities from retail customers and pay a $750,000 fine.
JPMorgan Chase & Co. fell 3.1%, Wells Fargo & Co. fell 0.6%, Bank of New York Mellon Corp. fell 1.5%, and Regions Financial Corp. fell 1.5%.
Other decliners Thursday included U.S. Bancorp, which fell 0.9%; Zions Bancorp., which fell 1.7%; and East West Bancorp, which fell 3.8%.
Gainers included State Street Corp., which rose 2.4%; SunTrust Banks Inc., which rose 1.8%; Fifth Third Bancorp, which rose 1.6%; and KeyCorp, which rose 1%.
The broader markets were also mixed Thursday. The Dow Jones industrial average fell 0.31%, while the Standard & Poor's 500 rose 0.34%.
The $775 billion stimulus package floated by President-elect Barack Obama may still "fall short of the mark," Scott A. Anderson, a senior economist at Wells Fargo, wrote in a note Thursday. "The amount of household wealth destruction seen over the past year could take decades to repair."
He cited a Congressional Budget Office report on the potential effects of such a package, including a budget deficit of at least 11% of the gross domestic product, "the worst deficit as a share of the economy since WWII, and a federal debt as a share of GDP of around 60%," the highest since 1954.
"Good luck engineering far lower interest rates or putting a floor under the dollar with that as a starting point," he wrote.
