State Street Plunges 45%, Wells Fargo Drops

123jump.com Staff
20 Jan, 2009
New York City

A decline in banks led the most the actively traded stocks in New York. State Street, the largest institutional money manager plunged nearly 45% on weak earnings outlook and dragged other asset managers with it. ConocoPhillips cut its capital spending by 18% and staff by 4%.

[R]2:00PM New York – A decline in banks led the most the actively traded stocks in New York. State Street, the largest institutional money manager plunged on weak earnings outlook.[/R]

Of the stocks in S&P 500 index, 440 declined, 59 rose and 1 was unchanged.

State Street Corp led the decliners with a plunge of 48% followed by losses at PNC Financial of 31%, in Bank of New York Mellon Corp of 20.5%, in Regions Financial of 20%, Bank of America of 17% and in Wells Fargo of 16.9%.

Newmont Mining led the gainers in the S&P 500 index with a rise of 7% followed by increase in Noble Energy Inc of 6%, in Precison Castparts of 5.6%, in Washington Post of 4.6%, in SLM Corp of 3.7% and in Supervalu Inc of 3.7%.

Other Movers

Aracruz Celulose S.A. ((ARA)) lost 12.8% or $1.48 to $10.05 after Votorantim Celulose e Papel another Brazilian paper and pulp maker said on Tuesday it would buy a 28.03% stake in Aracruz Celulose for 2.71 billion reais or $1.16 billion.

The Bank of New York Mellon Corporation ((BK)) lost as much as 27.3% or $6.13 to $16.81 after the State Street reported weak earnings outlook and dragged other asset managers and custodians.

The banking sector was weak after the UK offered another bailout in less than three months and plans to spend $140 billion or 100 billion pounds. UK government has been forced to effectively nationalize some of the largest banks in the country after the weak regulatory oversight encouraged banks to engage in reckless risk taking.

Bank of America Corporation ((BAC)) slid 16.4% or $1.18 to $6.00. Merrill Lynch & Co. Inc. which was recently acquired by Bank of America Corp. agreed to pay $475 million to settle a class-action lawsuit filed by Ohio’s State Teachers Retirement System.

Also, Bank of America may be forced to raise as much as $75 billion in capital to restore its regulatory capital base to the required level. 123jump.com estimates that the three largest banks, Citigroup, Bank of America and Regions Financial may need to raise collectively as much as $150 billion before the end of this year if the securities linked to real estates do not recover.

ConocoPhillips ((COP)) slipped 3.7% or $1.85 to $47.48 after the second-largest crude oil refiner announced that it would cut 4% of its work force curtail its capital spending by 18% and write off $34 billion in non-cash assets due to falling energy prices.

Forest Laboratories, Inc ((FRX)) added 3.7% or 96 cents to $26.72 after the U.S.-based pharmaceutical company reported third quarter revenues fell 0.03% to $998 million from $998.2 million a year ago. Net income in the quarter fell 38% to $188 million or 62 cents per diluted share compared to net income of $301.8 million or 96 cents per share a year ago.

Jefferies Group, Inc ((JEF)) declined 5.5% or 71 cents to $11.81 after the global investment bank and institutional securities firm reported fourth quarter revenues rose 15% to $114.7 million from $99.8 million a year ago. Net loss in the quarter was $443 million or $2.41 per diluted share compared to net loss of $24.2 million or 17 cents per share a year ago.

JPMorgan Chase & Co ((JPM)) slid 11.7% or $2.69 to $20.13 after the financial company Fox-Pitt Kelton cut its profit estimates for the bank on the estimates of higher credit costs and reserve until the first half of 2010.

The broker lowered its earnings estimate for the company for 2009 to $2.04 a share from $2.47 a share and to $3.14 a share from $3.61 a share for 2010.

Logitech International S.A. ((LOGI)) fell 3.9% or 54 cents to $13.21 after the marketing peripherals for personal computers and other digital platforms said third quarter revenues fell 16% to $627 million from $744 million a year ago. Net income in the quarter fell 70% to $40 million or 22 cents per diluted share compared to net income of $134 million or 71 cents per share a year ago.

Motorola, Inc ((MOT)) added 2.2% or 10 cents to $4.64 after Goldman Sachs on Tuesday upgraded Motorola Inc to conviction “buy” from “neutral” arguing that cost cuts should narrow losses in the company''s mobile devices division.

Natus Medical Incorporated ((BABY)) fell 23.6% or $2.34 to $7.57 after the medical devices maker to screen conditions for infants and newborns said its fourth quarter and full-year profit rose, but the results fell shy of Wall Street forecasts and the company guided estimates weaker-than-expected in 2009.

For the full year, the company expects to report profit of 65 cents to 66 cents per share on revenue of about $118.4 million. Analysts expect 2008 profit of 69 cents per share on revenue of $167.1 million.

Newmont Mining Corporation ((NEM)) gained 3.2% or $1.21 to $39.04 after the Perth, Australia based Alkane Resources elected the company to operate the Moorilda gold project in the New South Wales. Newmont is funding the first $5 million on exploration and will hold 51% stake in the project.

Noble Energy, Inc ((NBL)) jumped 3.3% or $1.55 to $48.34 an independent energy company announced a natural gas discovery at the Tamar prospect in the Matan license, offshore Israel. The Tamar #1 well, located in approximately below 5,500 feet of water, was drilled to a total depth of 16,076 feet to test a subsalt, lower-Miocene structure in the Levantine basin.

Parker-Hannifin Corporation ((PH)) fell 10.6% or $4.25 to $35.52 after the world leader in motion and control technologies reported second quarter revenues fell 5.0% to $2.7 billion from $2.8 billion a year ago. Net income in the quarter fell 26.7% to $155.4 million or 96 cents per diluted share compared to net income of $211.9 million or $1.23 per share a year ago.

Regions Financial Corporation ((RF)) lost 11.7% or 71 cents to $5.37 after the Alabama bank reported a fourth quarter loss due mainly to a $6 billion asset impairment charge to reflect declining value in its banking reporting unit. Regions lost 35 cents per share in the fourth quarter.

State Street Corporation ((STT)) dropped 41.9% or $15.37 to $20.92 after the financial holding company reported fourth quarter revenues rose 8% to $2.7 billion from $2.5 billion a year ago. Net income in the quarter fell 71% to $65 million or 15 cents per diluted share compared to net income of $223 million or 57 cents per share a year ago.

Wells Fargo & Company ((WFC)) lost 14.4% or $2.69 to $15.99. The CEO of Wells Fargo & Co., the nation''s fourth-largest bank said that the bank has sufficient capital and has grown its loan portfolio by 20% in the past year as it has grown its market share at the expense of weaker competitors.