Bank of America, M&I, Citi Group Plunge

Mayank Mehta
15 Jan, 2009
New York City

Banks and financial services stocks led the decliners in New York trading. Bank of America may need more capital from the government after the recently acquired Merrill Lynch lost more than expected. Most banks declined more than 10%. Marshall & Ilsley reported a loss.

[R]12:45PPM New York – Banks and financial services declined sharply after Bank America tried to cancel its merger with Merrill Lynch and sought more capital from the government.[/R]

Of the stocks in S&P 500 index, 57 increased, 441 declined and 2 were unchanged.

Marshall & Ilsley led the decliners in the S&P 500 index with a loss of 24.6% followed by losses in Genworth Financial of 22.6%, in Bank of America of 20.4%, in Fifth Third Bank of 17%, and Citigroup Inc of 17%.

Wells Fargo, Huntington Bank, Comercia, Key Corp, Regions Bank, MasterCard Inc and SunTrust dropped more than 10%.

Amphenol Corp led gainers in the S&P 500 index with a rise of 8.2% followed by increase in Ecolab Inc of 5.7%, in Lorillard Inc of 3.9%, in Apollo Group of 3.7% and in Forest Labs of 3.6%.

Other Movers

Amphenol Corporation ((APH)) added 11.6% or $2.54 to $24.44 after cable manufacturer said Thursday that it earned $98.7 million in the fourth quarter, or 56 cents a share compared to $100 million or 55 cents a share, in the year-ago quarter. Net sales fell 2.8% to $755 million from $777 million.

Apple Inc ((AAPL)) lost 4.9% or $4.20 to $81.13 after the maker of popular phone and music device said its chief executive Steve Jobs has taken a leave of absence to treat pancreatic cancer.

ArthroCare Corporation ((ARTC)) slumped 30.6% or $2.46 to $5.56 after the surgical-tool maker announced today that it received a letter from the Nasdaq Listing Qualifications Panel dated January 14, 2009, stating that the Panel has determined to suspend and de-list trading of the company’s common stock on The NASDAQ Stock Market.

Autodesk, Inc ((ADSK)) plunged 10.4% or $2.06 to $15.67 after the design software and services company lowered its outlook for fourth quarter earnings. The company now expects net income of 18 cents to 24 cents per share excluding charges, while revenue is estimated between $475 million and $500 million.

In November the software lowered earnings estimate to between 28 cents to 34 cents per share on revenue of $525 million to $550 million.

Bank of America Corporation ((BAC)) lost 16.8% or $1.72 to $8.48 amid reports that Bank of America needs another multibillion-dollar government injection. The bank may need another government bailout as results at the recently acquired Merrill Lynch were worse than expected. Chief executive Ken Lewis has overreached after the acquisition of Countrywide Financial and Merrill Lynch. Losses at Countrywide are expected to reach as high as $26 billion.

Citigroup Inc ((C)) slid 11.0% or 50 cents to $4.03 ahead of earnings release tomorrow. Analysts are estimating large losses and more plans to sell non-banking businesses.

CLARCOR Inc ((CLC)) added 5.4% or $1.51 to $29.00 after the filtration products maker said fourth quarter revenues rose 12% to $266 million from $238.3 million a year ago. Net income in the quarter climbed 9% to $29.1 million or 56 cents per diluted share compared to net income of $26.7 million or 53 cents per share a year ago.

Cypress Bioscience, Inc ((CYPB)) rallied 23.3% or $1.68 to $8.88 after the San Diego, California based developer of medical devices and drugmaker Forest Laboratories, Inc. announced that Savella a selective serotonin was approved by the FDA for the management of fibromyalgia.

Fibromyalgia is a chronic condition characterized by widespread pain and decreased physical function, afflicting as many as six million middle-age women in the United States.

Coventry Health Care, Inc ((CVH)) declined 5.2% or 63 cents to $11.41 after the provider of Medicare health plans to the elderly estimated annual earnings of $1.90 a share, sharply lower than the consensus estimate of $2.29 a share.

Ecolab Inc ((ECL)) gained 8.5% or $2.81 to $35.82 after the services for the hospitality, foodservice, healthcare and industrial markets said it’s restructuring its businesses and will cut 1,000 positions, or 4% of its 26,000 person workforce.

Marshall & Ilsley Corporation ((MI)) fell 19.6% or $2.09 to $8.64 after Wisconsin’s largest bank posted a fourth quarter loss on defaults by homebuilders. The bank reported fourth quarter net loss of $403.9 million or $1.55 per diluted share compared to net income of $1,150.9 million or $1.83 per share a year ago. In the fiscal 2008 total net loss was $568.3 million or $2.19 a diluted share compared to net income of $496.9 million or $4.34 per share a year ago.

Trimble Navigation Limited ((TRMB)) fell 24.1% or $4.75 to $14.90 after the maker of global-positioning equipment lowered its quarterly earnings between 22 cents to 24 cents a share, on revenue of $268 million to $269 million. In October the company had forecast revenues between $315 million to $323 million.

Vornado Realty Trust ((VNO)) lost 4.8% or $2.45 to $48.20 after the fourth biggest U.S. real estate investment trust declares quarterly dividend on common shares of 95 cents per share, payable 40% in cash and 60% in shares.

Xilinx, Inc ((XLNX)) declined 4.5% or 73 cents to $15.50 after the chip maker said third quarter revenues slid 3.5% to $458.4 million from $474.8 million a year ago. Net income in the quarter surged 35% to $139.4 million or 51 cents per diluted share compared to net income of $103.6 million or 35 cents per share a year ago.