3 Things That Could Move Financial Stocks Today
NEW YORK ( TheStreet) -- Shares of Bank of America (BAC) are likely to be in focus as the bank continues to flirt with the $10 spot. After briefly crossing the psychological mark, the shares slid sharply during the late hours of trading on Monday.
A rumor that the bank was planning a secondary offering may have explained some of the nearly 3% slide in shares. Bank of America said after the bell that it has no intention of issuing new equity in secondary offering. Shares closed at $9.53 on Monday but showed sign of a recovery in aftermarket trading.
Still, analysts contend that the rally in Bank of America shares has been too much too soon and that the bank will have to prove that it can grow earnings at a sufficient clip to sustain the rally.
Morgan Stanley analyst Betsy Graseck raised her estimates for Bank of America on Monday and also her price target on the stock to $9 from $7 previously.
A federal appeals court delayed its decision on the Securities and Exchange Commission appeal against a lower court's rejection of a $285 million settlement with Citigroup(C) to September, Reuters reported.
That means Judge Jed Rakoff's earlier rejection of the settlement still stands until oral arguments are heard later this fall.
Citigroup last year agreed to pay the SEC $285 million to settle charges that it had misrepresented mortgage-backed securities it sold to investors and then proceeded to bet against the debt underlying the securities.
Rakoff rejected the settlement arguing that the SEC acted against public interests in allowing the bank to neither admit nor deny the allegations. The SEC then appealed the decision saying it had arrived at the settlement after carefully weighing the costs of going to trial.
Last week, the court indicated that the SEC had a good chance of winning its argument and that Rakoff overstepped his authority in dictating policy to the regulator.
However, it looks like it is too soon for the SEC and Citigroup to celebrate.
Goldman Sachs (GS) has begun a new round of layoffs as part of its annual review process, Reuters reported, citing persons familiar with the matter.
The new job cuts are across sales and trading, investment banking, wealth management and investing and lending, according to the report.
Goldman has also been cutting some staff from divisions likely to be affected by new trading restrictions, such as merchant banking.
The investment bank is targeting $1.4 billion in annual expense savings.
--Written by Shanthi Bharatwaj in New York
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