Top Financial Stocks
Financial stocks have turned broadly higher this afternoon, with the NYSE Financial Sector Index rising more than 0.2% while financial companies in the S&P 500 Index were advancing over 0.9%. Elsewhere, the Philadelphia Housing Sector Index was climbing less than 0.1, reversing a significantly larger gain earlier in the session.
In economic news:
Existing home sales unexpectedly fell 3.2% during January from the prior month to a seasonally adjusted annualized pace of 5.38 million sales, compared with a downwardly revised 5.56 million year-over-year pace in December. The slowdown lagged expert opinion looking for a 5.65 million annualized pace last month and represents the slowest rate since 1999. Home sales also declined 4.8% year-over-year during January for the steepest slide since August 2014 while home prices also softened, with the median selling price slipping 2.4% from December levels to $240,500 but remaining 5.8% higher than January 2016.
Also, the purchasing managers index climbed to a 27-month high and a 55.9 preliminary February reading, surprising analysts looking for a 54.0 mark, on average, in a Econoday survey. Services recoverd from recent softness, rising 2.6 points to a six-month high of 55.9, also beating expectations for a 53.5 score. Manufacturing added 0.4 points to 55.9, touching a 40-month high.
The U.S. equity markets gave back a portion of their earlier gains after minutes from the most recent Federal Open Markets Committee meeting appeared to support expectations for another quarter-point rate increase at the panel's upcoming March 20-21 meeting. Economic activity prior to the Jan. 30-31 FOMC meeting was consistent with above-trend growth and further strengthening in the labor market, indicating "substantial underlying economic momentum," the minutes said. Inflation also was expected to rise during 2018 before stabilizing around the committee's 2% objective, participants stated, later stressing it will be important to monitor future developments closely.
Among financial stocks moving on news:
- LaSalle Hotel Properties' ( LHO ) dropped to a nearly 17-month low on Wednesday, sinking to its lowest share price since October 2016 at $24.25 each after the real estate investment trust reported adjusted Q4 funds from operations of $0.53 per share, down from $0.62 per share during the same quarter last year and matching the Capital IQ consensus call. Revenue also declined to $257.10 million from $289.49 million during the year-ago period, trailing the $264.33 million Street view. Looking forward, the company is projecting adjusted FFO of about $0.27 per share compared with Wall Street expectations looking for $0.36 per share during the current quarter ending March 31.
In other sector news:
+ Flagstar Bancorp ( FBC ) added almost 2% in value Wednesday, staying near its session high of $36.06 a share, that followed the lender saying it has agreed to buy a mortgage warehouse loan portfolio from Santander Bank ( SAN ). Terms of the transaction were not disclosed and is expected to close before the end of March.
+ Lloyds Banking Group ( LYG ) on Wednesdqay climbed to within 20 cents - or less than 5% - of its 52-week high of $4.21 a share after authorizing a new buyback program for up to GNP1 billion of its common stock. It also plans to invest another $4.18 billion to further digitalize the bank and offer additional new products for customers.
- RAIT Financial Trust ( RAS ) shares plunged Wednesday, sinking over 20%, after the real estate investment trust said a special committee of independent trustees has completed a review of the company without identifying a suitable strategic or financial transaction with another entity. As a result, the full board has determined the company should take steps to increase its liquidity and better position it to meet its financial obligations as they come due and to continue to operate as a going concern. Those steps include ending RAIT's lending business in addition to other cost-savings activities. It also will continue selling off the company's property portfolio while servicing and managing its existing commercial real estate loan portfolio.
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