Shares of Wells Fargo & Co. did a 180-degree turn on Friday.
After rising unexpectedly a day earlier on news of a dividend cut, they plunged as investors apparently concluded earnings prospects are less than rosy at the San Francisco superregional bank.
Well stock skidded $5.50 to $55, a drop of 8.5% on heavy volume after having been down as much as $6.25 during the afternoon. In contrast, other California banking stock rose, paced by a $1.50 rise at BankAmerica Corp. to $35.
"It appears to have sunk in with some people that Wells' earnings are not going to rebound to where they had been," said James M. Rosenberg, a banking analyst at Shearson Lehman Brothers, New York, who follows the stock.