US Financial Stocks Drop After Oppenheimer Comment On Capital Need
By Daniel at 7 January, 2009, 11:26 am
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By Greg Morcroft
U.S. financial shares fell broadly Wednesday, pulling back after an influential
Oppenheimer & Co. analyst said that banks will need to raise lots of additional
capital this year - and likely will face further credit downgrades as a result.
“From July 2007 to date, over $5 trillion worth of securities have been
downgraded, but our concern here is that the pace of downgrades has only
accelerated through 2008,” Oppenheimer’s Meredith Whitney wrote in a research
report.
The Financial Select Sector SPDR, an exchange-traded fund that tracks the
financial-stock components in the S&P 500, recently fell 2.8%.
Among shares of the nation’s largest banks, JPMorgan Chase & Co. (JPM) dropped
2.9% in early action, Citigroup Inc. (C) was off 2.8%, and Bank of America Corp.
(BAC) shed 2.7%.
Late Tuesday, Ken Lewis, chief executive of Charlotte-based Bank of America, said
investors should expect 2008 financial results to come in below forecasts.
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