Financial Sector Update for 03/07/2018: TRNO,RBS,SPGI,MS,BBX,WHLR,ADP

Top Financial Stocks

JPM -0.09%

BAC +0.33%

WFC -0.81%

C -0.01%

USB -0.81%

Financial stocks pared most of their prior losses from earlier Wednesday, instead ending little changed to narrowly mixed. At last look, the NYSE Financial Sector Index was down less than 0.1% while financial companies in the S&P 500 Index were inching less than 0.1% higher. Also, the Philadelphia Housing Sector Index was climbing more than 0.2%.

In economic news:

The U.S. trade deficit widened sharply during January to $56.6 billion, likely providing President Donald Trump with additional ammunition in his plan to place tariffs on imported steel and aluminum. Imports were little changed during January from the previous month at $257.5 billion while exports declined 1.3% to $200.9 billion. Exports of capital goods fell by $2.6 billion, or about 5.5%, to $44.9 billion, largely due to a 32% drop of $1.8 billion in civilian aircraft exports to $3.8 billion. Exports of industrial supplies, which includes primary metals, decreased just over 30% to $41.5 billion. Petroleum imports increased by $2.2 billion to $13.2 billion.

Also Wednesday, payroll processor ADP ( ADP ) said private-sector employers hired 235,000 new workers in February, topping expert opinion looking for around 205,000 hires last month. January employment also was revised slightly higher from initial estimates, climbing to 244,000 from 234,000 new employees first reported for the month.

The U.S. Federal Reserve took center stage this afternoon, releasing its Beige Book assessment of economic conditions in its 12 member districts in addition to its weekly report of consumer credit activity. The central bank said U.S. growth continued to expand at a modest to moderate pace and found labor market and price increases throughout all districts. Home sales were somewhat constrained in many districts, the Fed said, due to limited inventory.

Among financial stocks moving on news:

+ Terreno Realty ( TRNO ) was more than 1% higher in late trade, staying within relatively close distance of its session high of $34.87 a share after the real estate investment trust Wednesday said it yesterday acquired an industrial property in Woodside, Queens in New York City for about $25.2 million. The property consists of one industrial distribution building that is being renovated to contain around 83,000 square feet of space on 3.7 acres near the junction of the Brooklyn-Queens Expressway and Grand Central Parkway. The property currently is 23% leased to a single tenant on a short-term basis and has an estimated stabilized cap rate of 5.7%.

In other sector news:

+ BBX Capital ( BBX ) was more than 1% higher late Wednesday after the Florida-based property manager declared a $0.01 per share dividend, up 33.3% over its most recent distribution of $0.0075 per share and payable April 20 to shareholders of record on March 26.

- Royal Bank of Scotland ( RBS ) was ending slightly lower Wednesday, recovering from a nearly 1% decline soon after the opening bell that followed New York attorney general Eric Schneiderman announcing a $500 million settlement agreement with the UK bank company over allegations of "deceptive practices and misrepresentations to investors" on residential mortgage-backed securities. The settlement includes a $100 million cash payment to the state and $400 million of consumer relief for homeowners and communities. Schneiderman previously settled with five other large banks, receiving $3.7 billion in fines and restitution for consumers, for their roles in the 2008-'09 financial crisis.

- S&P Global ( SPGI ) declined Wednesday, with the financial analytics firm receiving little apparent help from its after-market announcement it has entered into a $1 billion accelerated share buyback agreement with Morgan Stanley (MS). The transaction is expected to close before the end of March and S&P Global said it will use available cash to fund the upcoming transaction. The new stock buyback is being executed under the company's existing board authorization, it said, adding it expects to pay out at least 75% of its free cash flow to shareholders in 2018 through dividends payment and stock buybacks.

- The Wheeler Real Estate Investment Trust (WHLR) plunged to a record low on Wednesday, sinking over 26% to a worst-ever $3.67 a share, after late Tuesday reporting a Q4 net loss of $1.22 per share, expanding from a $0.73 per share loss during the same quarter last year and missing the two-analyst consensus looking for a net loss of $0.56 per share. Total revenue from continuing operations increased by 18.9% to $14.3 million from $12.0 million during the year-ago period, roughly in-line with the mean call of the two analysts polled by Capital IQ. Excluding one-time items, Wheeler also recorded non-GAAP Q4 funds from operations of $0.18 per share, improving on adjused FFO of $0.16 per share last year.

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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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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