Magazine article American Banker

Bush Prospects Lift Banks; Fifth Third Is Rated 'Buy'

Magazine article American Banker

Bush Prospects Lift Banks; Fifth Third Is Rated 'Buy'

Article excerpt

Shares of the biggest U.S. banking companies rose with the broader market in pre-election trading Monday.

Bank of America Corp.'s shares rose $2.375, or 4.88%, to $51.0625; Citigroup Inc.'s 93.75 cents, or 1.74%, to $54.875; and J.P. Morgan & Co.'s $4.8125, or 2.98%, to $166.3125.

The rise was generally attributed to the indications that Texas Gov. George W. Bush had an election-eve edge. But analysts said there was no clear sense that a Gore victory would hurt big banks.

Investment banks dropped, led by Morgan Stanley Dean Witter & Co., off $3.3125, or 3.96%, to $80.25; and Lehman Brothers, down $1.625, or 2.61%, to $60.6875.

The American Banker index of 225 banks gained 0.6%, while the index of top 50 banks rose 1.25% with the Dow Jones industrial average, which was up 1.47%. The Nasdaq composite dropped, closing down 1.02%.

Salomon Smith Barney initiated coverage for Fifth Third Bancorp with a "buy" rating, which may reflect optimism about growth in the heartland. Salomon analyst Keith Horowitz wrote in a research report that the Cincinnati banking company has a "better than average" business mix and can continue to increase its earnings per share by 15%. He set a price target of $65 a share.

On Monday, Fifth Third closed at $51.8125, down 1.25 cents, or 0.24%.

Adam J. Lewis, the head of bank stock trading at Keefe, Bruyette & Woods, said that the market in general would probably react more positively to a Bush victory, but that it would be less important to financial stocks than to those of drug companies and other industries. …

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