Trust banks were mixed after UBS Securities LLC analyst Glenn Schorr initiated lukewarm coverage on several companies.
Mr. Schorr wrote in a research report that though times are tougher than in the 1990s, "attractive attributes of the business model remain."
He gave Mellon Financial Corp. a "neutral 2" rating, Northern Trust Corp. a "neutral 1," and Street Corp. a "buy 2." (Under UBS' tiered rating system a "1" has a higher degree of predictability and a "2" a lower degree.)
The American Banker index of 225 banking stocks fell 0.35%, and the Standard & Poor's 500 gained 0.02%.
Fitch Inc.'s downgrading of General Motors Corp. and General Motors Acceptance Corp. weighed on the market. The ratings agency cut GM and GMAC's to junk status on continued worries about North American auto sales.
GM, a Dow Jones Industrial Average component, fell 2.8%.
UCBH Holdings of San Francisco, which announced Tuesday morning that it was buying Pacifica Bancorp Inc. of Bellevue, Wash., for $40.3 million, was down more than 1.3% in mid-session trading but managed to finish the day just 0.3% lower.
Reiterating his "hold" on UCBH's stock, Sandler O'Neill & Partners LP analyst Brian Conn wrote in a report: "We view the deal positively, as a low-risk move into an attractive market that allows the company to continue to grow within its Chinese-American niche and leverage its trade finance capabilities."
Among the day's gainers, the Federal Agricultural Mortgage Corp. better known as Farmer Mac, rose 2.2%; AmeriCredit Corp. in Fort Worth, 2.1%; and AmericanWest Bancorp of Spokane, 2.1%.
Among the declining banking stocks, 1st State Bancorp Inc. of Burlington, N.C., fell 4.4%; Doral Financial Corp. of San Juan, Puerto Rico, 3.7%; and Commerce Bancorp Inc. of Cherry Hill, N.J., 2.7%.
