Sector Wrap: Regional bank stocks fall
NEW YORK (AP) — Shares of regional banking companies fell Tuesday, as Credit Suisse analysts said they expect slowing demand for commercial and industrial loans to dampen the companies' outlook over the next 12 months.
The decline came in an overall cascading market, as the Dow Jones industrial average plunged to its lowest level in nearly seven weeks as big-name companies reported weak quarterly revenues. The Dow average sank as much as 262 points, or about 2 percent, before ending the day down 243.36 points at 13,102.53. It was the Dow's third-steepest decline this year.
Leading the regional bank pack downward was Regions Financial, whose stock lost 54 cents, or 7.6 percent, to close at $6.54. The bank posted sharply higher third-quarter earnings Tuesday, having set aside less cash to cover loan losses. But its shares fell steeply after the results showed that record-low interest rates cut into interest income from loan and deposits.
Shares of Regions, based in Birmingham, Ala., have traded between $3.51 and $7.73 in the past 52 weeks.
The Credit Suisse analysts noted that regional banks are feeling the pinch of the economic slowdown in reduced borrowing by commercial and manufacturing businesses.
Atlanta-based SunTrust Banks Inc. reported Monday that its third-quarter earnings climbed sharply, but the gain was mainly because it sold shares it owned in Coca-Cola Co. SunTrust shares eased 43 cents, or 1.6 percent, Tuesday to close at $27.24. SunTrust shares have traded between $15.79 and $30.79 in the past 52 weeks.
Among other regional banks, BB&T Corp. declined 56 cents, or 1.9 percent, to $28.81; Fifth Third Bancorp fell 35 cents, or 2.3 percent, to $14.69; KeyCorp lost 17 cents, or 2 percent, at $8.43; and M&T Bank Corp. slipped 68 cents, or 0.7 percent, to $103.89.