Magazine article American Banker

Bank Rally Evaporates as Profit Takers Appear

Magazine article American Banker

Bank Rally Evaporates as Profit Takers Appear

Article excerpt

After rallying for the last two days, bank stocks retreated Thursday as investors took profits.

Volume remained strong, with Citicorp continuing to figure among the most active issues on the New York Stock Exchange.

A rise in interest rates dampened the stock market for most of the day, but a late rally raised the Dow to 3,348.61, up 9.84 points from Wednesday.

Among Larger Banks

Wells Fargo & Co., the biggest gainer of the week, was off 75 cents, to $79. Its rival, BankAmerica Corp., was off 12.5 cents, to $46.875. J.P. Morgan & Co. was down 25 cents, to $55.625.

Citicorp was off 62.5 cents, to $19, with turnover at nearly two million shares. But that still left it with a hefty gain in value of nearly 15% this week.

During the first three days of the week, fueled by fresh buy ratings from several analysts, the shares stood out amid the rally by banking stocks in general.

The bank's average daily volume was 5.16 million shares, as opposed to a typical 1.42 million during the six previous weeks.

Behind the Run-Up

Citicorp's rise, along with that of Wells Fargo - both on unexpectedly good results - is credited with helping spark the run-up in bank issues this week.

"There were some very negative opinions out there influencing Citicorp's stock during the first quarter," said Frank J. Barkocy, a bank analyst in New York for Advest Inc.

"But when the first-quarter numbers came in and doomsday wasn't quite in sight, a few attitudes had to be adjusted," he said.

While the quarterly results were by no means great, "they did illustrate that the process of capital reformation is underway" at the nation's largest banking organization, he added.

Those Who Stayed True

The market's positive reaction to Citicorp's results has been a satisfying experience for the analysts who stayed bullish on the bank's prospects during the winter. …

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