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May 20, 2010 Thursday 5:17 PM EST
SECTION: NEWS & COMMENTARY; Markets; Financial Stocks
LENGTH: 352 words
HEADLINE: Banks, insurers hit in latest financials swoon
BOSTON (MarketWatch) — Shares of U.S. financial companies led broader U.S. stocks losses on Thursday an investors fretted about trading restrictions in Europe and the U.S. Senate’s debate over financial legislation.
The Financial Select Sector SPDR Fund (XLF) was off 4.6% as the Dow Jones Industrial Average (INDU) fell nearly 400 points. Europe’s debt woes and a report from the Labor Department showing weekly jobless claims rose to the highest level in a month also weighed on sentiment.
Bank of America Corp. (BAC) led losses among Dow Jones Industrial Average components, losing 6.2%.
The Senate voted Thursday to end debate on a bank reform bill, setting the stage for enactment of legislation potentially by the end of the week.
“Financial reform is once again under the spotlight, as a flurry of amendments have surfaced to fill the post-first-quarter earnings information void,” Collins Stewart said in a research note Wednesday, adding the ultimate impact of financial reform is difficult to handicap at this stage.
“With over 320 amendments currently attached to the bill, and significant new provisions added daily, the overhang on the U.S. banks sector will likely be considerable until final resolution of the bill,” the analysts wrote.
Shares of Zions Bancorp (ZION) dropped 6.7% after the bank priced $175 million of warrants to buy its common stock. Other regional banks losing ground Thursday included Regions Financial Corp. (RF) and Marshall & Ilsley Corp. (MI) .
Bond insurer Ambac Financial Group Inc. (ABK) slipped 5.6%. The stock has lost over a quarter of its value this week. The company on Tuesday reported a wider quarterly loss. Bond insurers MGIC Investment Corp. (MTG) and MBIA Inc. (MBI) were off 8.3% and 9.6%, respectively, on Thursday.
Citigroup Inc. (C) retreated 4.7% and Wells Fargo & Co. (WFC) lost 4.6%.
Card company MasterCard Inc. (MA) was among the financial sector’s few winners Thursday, advancing 1.5%. Competitor Visa Inc. (V) retreated 0.2%.
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