Bank and financial stocks were mixed on Thursday as investors mulled an inconsistent round of first-quarter earnings reports.
Investors reacted to positive news by taking profits and selling shares. In cases where companies met or exceeded expectations but included one-time gains and special charges in their reports, the reaction was more muted.
Charles Schwab & Co. more than doubled its first-quarter 1998 earnings, to 34 cents a share, beating consensus by 1 cent-and stockholders' profit taking sent the stock down almost 14%, to close at $123.50.
Similarly, shares of Capital One Financial Corp. of Falls Church, Va., fell 7%, to $159.8125, after the bank posted earnings of $1.18 per share, meeting the consensus expectation.
Analyst Moshe Orenbuch of Donaldson, Lufkin, & Jenrette said investors who had loaded up on the stock in anticipation of the earnings report. The company's stock has been on a steady rise since its 52-week low of $51.75 in October.
Shares of KeyCorp, Cleveland, fell 4%, to $30.375, after the company reported first-quarter earnings of 65 cents, a penny shy of Wall Street analysts expectations. Comerica Inc. shares slipped slightly after the company announced first-quarter profits that hit analysts' expectations of 98 cents per share.
"Banks have done generally well. We thought we'd see some upside surprises, and we got them." said George Bicher, an analyst at Alex. Brown & Sons.
After posting strong first-quarter earnings earlier this week, Amsouth Bancorp., Birmingham, Ala., announced a 3-for-2 stock split Thursday to stockholders of record as of April 30.
The recent phenomenon of financial services companies' stock gyrating wildly on Internet news continued on Thursday.
The securities firm Friedman, Billings Ramsey Group said Thursday that it plans to offer Internet investors 20% of the shares of the initial public offerings it underwrites. The announcement sent the company's stock soaring. Shares traded as high as $17.50 during the day, but closed at $14.4375, 47% above Wednesday's close of $9.8125.
Shares of Netbank Inc. continued their wild ride, trading as low as $125 before closing off $12 at $160. Last Friday the Internet-only bank closed at $119.50, and the stock traded as high as $235.00 during the week.
Stock prices of some on-line trading firms have "gotten ahead of themselves," Mr. Bicher said, while banks like Fleet Financial Group. have seen no effect from holding an on-line trading firm.