Speculation that document-disclosing website WikiLeaks has sensitive data about Bank of America Corp. drove banking stocks lower on Tuesday, though the sector recovered in an afternoon rally.
The KBW Bank Index was down 0.31%, to 44.94, in late afternoon trading after falling as low as 44.61 earlier in the day.
Bank of America's shares fell steadily throughout the day as investors suspected the controversial whistle-blowing organization had set its sights on Bank of America. WikiLeaks founder Julian Assange told Forbes that it planned to release internal documents about a major bank that "will stimulate investigations and reforms," the magazine said on its website Monday. He would not name the bank.
But he said in an interview with Computerworld published last year that WikiLeaks had obtained several gigabytes of data from a Bank of America executive's hard drive.
"At the moment, for example, we are sitting on 5GB from Bank of America, one of the executive's hard drives," he was quoted in October 2009 as saying. "Now how do we present that? It's a difficult problem. We could just dump it all into one giant Zip file, but we know for a fact that has limited impact. To have impact, it needs to be easy for people to dive in and search it and get something out of it."
Bank of America was down 2.96% to $10.99 in afternoon trading. The company did not immediately return a call seeking comment.
Also weighing on bank stocks were concerns that Europe's debt problems would get worse as yields on Spanish and Italian bonds rose.
JPMorgan Chase & Co. fell 1%; U.S. Bancorp, 0.87%; BB&T Corp., 1.65%; PNC Financial Services Group Inc., 0.5%.