Bank Stocks Stall: Financial Losers

Tickers in this article: I:BKX MS

NEW YORK ( TheStreet) -- Morgan Stanley (MS) was the loser among the largest U.S. banks on Monday, with the shares down 2% to close at $22.31.

The broad indices ended flat, as investors paused after last week's rally.

The Census Bureau on Monday said durable-goods orders rose 4.6% in December after rising 0.7% in November, with much of the increase coming from orders from defense firms and commercial-aircraft manufacturers. Economists, on average, were expecting orders to rise 1.8% in December, according to Briefing.com.

Excluding transportation orders, durable-goods orders rose 1.3% during December, after advancing 1.2% the prior month. It was the fourth straight month of gains exceeding 1%. The consensus estimate was for orders to increase by 0.7%.

The National Association of Realtors said that pending home sales in January declined 4.3% from December, after rising 1.7% in November. Sales were up 6.9% year-over-year. NAR chief economist Lawrence Yu said "the supply limitation appears to be the main factor holding back contract signings in the past month. Still, contract activity has risen for 20 straight months on a year-over-year basis."

Turning back to the stock market, research firm FactSet said early Monday that "of the 134 S&P 500 companies that have reported earnings to date for the fourth quarter, 69% have reported earnings above estimates," which was equal to the average number of names beating the consensus estimates over the previous four quarters. However, "in terms of revenues, 64% of companies have reported sales above estimates," the firm said, which is "well above the average of 50% recorded over the past four quarters."

The KBW Bank Index (I:BKX) was down slightly to close at 53.89, with the 24 index components evenly split.

Two Important Dates for Bank Stock Investors


The Federal Reserve on Monday announced plans to release the results of its latest annual round of supervisory bank stress tests on March 7, with released data including "capital ratios, revenue and loss estimates under a severely adverse scenario and assuming a common set of capital actions that is used in the analysis of all of the firms." More importantly to bank stock investors, the regulator on March 14 will announce the results of its annual Comprehensive Capital Analysis and Review (CCAR), which will apply the large banks' capital plans to the severely adverse economic scenario.

That means March 14 is likely to include announcements from many of the best-known banking names of Federal Reserve approval for dividend increases and share buybacks, running through the first quarter of 2014.

Both announcements will be made at 4:30 p.m. EST.

Morgan Stanley


Morgan Stanley's shares have now returned 17% this year, following a 28% return last year. The shares declined 44% during 2011. Putting those numbers together, the shares are down 13% since the end of 2010.