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Financial Sector Update for 03/01/2018: EFX,AFSI,FISI,EPR


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Financial stocks were trending lower shortly before Thursday's closing bell, with the NYSE Financial Sector Index Thursday slipping nearly 1.1% while financial companies in the S&P 500 Index were falling more than 1.6%. The Philadelphia Housing Sector Index was sinking nearly 1.0%.

In economic news:

Stocks tumbled, with the major averages falling more than 2% on fears of looming trade war with China, after the White House Thursday said it would slap tariffs on imported steel and aluminum, adding 25% to the price of steel and 10% for aluminum. President Donald Trump pledged the tariffs will remain in place "for a long time." The administration is expected to release additional details about the tariffs - including potential exemptions for certain allies - early next week when Trump signs the finalized sanctions.

The long-promised tariffs upstaged a slew of largely positive economic reports earlier in the session, including consumer spending rising a scant 0.2% during January, matching expert opinion, while personal incomes rose 0.4%, beating the consensus view by 0.1 percentage points. After-tax incomes saw their largest rise since 2012 when changes enacted late last year in federal tax law reduced the average tax burden for U.S. consumers in January by 3.3%.

First-time jobless claims fell by 10,000 during the week ended Feb. 24 to 210,000 applications, hitting their lowest levels since 1969. Forecasts were expecting a rise in initial applications for unemployment benefits to 226,000 claims. Continuing claims increased by 57,000 to 1.93 million. Also, The Federal Reserve's preferred PCE inflation index surged 0.4% in January while core PCE, which strips out food and energy, climbed 0.3% to match its year-ago increase in addition to consensus expectations.

Among financial stocks moving on news:

- Equifax ( EFX ) declined Thursday after the credit-reporting agency said it found another 2.4 million U.S. consumers had some of their driver's license data compromised in the 2017 cybersecurity attack. Those consumers join an estimated 150 million Americans the company previously said had their social security numbers taken in addition to their home addresses and other identifying information. "This is not about newly discovered stolen data," interim CEO Paulino do Rego Barros Jr. said. "It's about sifting through the previously identified stolen data, analyzing other information in our databases that was not taken by the attackers, and making connections that enabled us to identify additional individuals."

Atlanta-based Equifax's shares plunged to a more than two-year low and the credit monitoring company faced a series of class-action lawsuits and lawmaker queries after it said in September that the cybersecurity incident affected some 143 million US consumers.

Then CEO Richard Smith announced his retirement on Sept. 26 and Barros, then Equifax's Asia-Pacific president, was appointed to fill in while the company searched for a permanent replacement.

"We are committed to regaining the trust of consumers, improving transparency, and enhancing security across our network," Barros said on Thursday.

On Jan. 31, the company released Lock & Alert for US consumers, offering them the ability to "quickly lock and unlock their Equifax credit report using a computer or app downloaded on their mobile device."

In other sector news:

+ AmTrust Financial Services ( AFSI ) sped to a session high of $13.28 a share, rising almost 11%, after the company said it has agreed to sell the 45% minority stake in the property and casualty insurer not already owned by CEO and board chairman Barry Zyskind and family members George and Leah Karfunkel to Evergreen Parent LP, an entity formed by Zyskind and funds managed by private equity investor Stone Point Capital LLC for about $2.7 billion. Under terms of the proposed transaction, AmTrust shareholders will receive $13.50 in cash for each of their shares, a 12.8% premium over Wednesday's closing price for the stock. The deal is expected to close during the second half of the year.

+ Financial Institutions ( FISI ) was about 1% higher during Thursday afternoon trading, remaining near its $31.00 a share session high, after the firm said it was increasing its quarterly dividend by 9.1% over its most recent distribution to $0.24 per share, payable April 2 to shareholders of record on March 15.

- EPR Properties ( EPR ) slid to a 29-month low on Thursday, dropping to its lowest price since September 2015 at $52.66 a share, after the real estate investment trust reported Q4 financial results lagging analyst expectations and cut its FY18 forecast, prompting at least one analyst downgrade to Sector Weight from Overweight at KeyBanc. Excluding one-time items, the company generated adjusted funds from operations of $1.29 during the three months ended Dec. 31, up from $1.26 per share last year and trailing the Capital IQ consensus by $0.13 per share. Revenue increased 13% year-over-year to $147.7 million, also lagging the $151.9 million Street view. Looking forward, the company cut its outlook for adjusted FY18 FFO by $0.10 per share compared with its prior forecasting expecting between $5.23 to $5.38 per share.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Banking and loans
Referenced Symbols: EFX , AFSI , FISI , EPR



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