Financial Sector Update for 03/15/2018: CMO,CWAY,HONE,BKI,WFC

Top Financial Stocks

JPM +0.29%

BAC -0.16%

WFC +0.45%

C -0.25%

USB +0.08%

Financial stocks have turned little changed in late Thursday trading, giving back solid gains earlier in the session, and the NYSE Financial Sector Index falling almost 0.1% while financial companies in the S&P 500 Index were climbing nearly 0.1%. The Philadelphia Housing Sector Index was over 0.8% lower this afternoon.

In economic news:

First-time jobless claims fell to a 50-year low on Thurday, slipping by 4,000 applications during the week ended March 10 from a downwardly revised 230,000 claims during the prior week. The four-week moving average also declined for the seventh time in nine weeks to 221,500 initial claims for unemployment benefits, dropping by nearly 7,000 claims from month-ago levels. Continuing claims also stayed at favorable levels, falling by 17,000 claims over the four weeks ended March to a average of 1.891 million applications, or almost 30,000 below the four-week rolling average for the second week in February.

Import prices rose by 0.4% in February over January levels, which were revised 0.2 percentage points lower to a 0.8% rise. The February increase topped Wall Street opinion expecting a 0.3% month-over-month advance. Excluding petroleum, import prices rose by 0.5% for the second month in a row. The pace of growth was significantly slower for exports, climbing just 0.2% on a monthly basis following an 0.8% increase in January.

Home builders also remain extremely optimistic, with a March housing index score of 70, down 2 points from February. Among individual components, future sales were down 2 points at 78 while traffic declined by 3 points to a 51 reading this month. Manufacturing activity throughout the state of New York and a handful of adjacent locations in Connecticut and New Jersey heated up to a 22.5 reading in March, breezing past consensus opinion looking for a rise to a 15.0 score from February's 13.1 reading, according to the New York Federal Reserve. Factory activity next door in the region covered by the Philadelphia Federal Reserve Bank eased slightly this month from the prior month, with its Business Outlook survey dropping to a 22.3 March reading following a 25.8 score in February.

Among financial stocks moving on news:

+ Tiptree Financial ( TIPT ) rose almost 2% during Thursday trading, touching a session high of $6.20 a share after the specialty insurance company saw its FY17 per-share earnings shrink compared with the prior year period despite a nearly 15% year-over-year increase in revenue. The company earned $0.11 per share during the 12 months ended Dec. 31, down from $0.78 per share during FY16. Revenue rose to $581.8 million from $506.4 million last year. No analyst estimates were available for comparison.

In other sector news:

+ Coastway Bancorp ( CWAY ) jumped out to a record high on Thursday, rising almost 23% to a best-ever $27.60 a share, after late Wedneday agreeing to a $125.6 million buyout offer from HarborOne ( HONE ). Under terms of the proposed transaction, HarborOne will pay $28.25 in cash for each Coastway share, representing a 25.6% premium over Wednesday's closing price. The deal is expected to close during the second half of 2018.

+ Wells Fargo & Company ( WFC ) was hanging on to a slim gain in recent trade, turning around a nearly 1% decline soon after the opening bell, following reports Thursday it is facing sanctions after allegedly forcing more than half a million drivers to buy its auto insurance policies. Citing people with direct knowledge of the probes, Reuters said the Office of the Comptroller of the Currency is asking Wells Fargo which of its executives knew about the insurance scheme and whether they could have stopped the policy sales sooner.

- Black Knight ( BKI ) declined Thursday, slipping just under 1% to a session low of $48.50 a share, after the financial software company said Bank of the West was expanding its use of Black Knight's LoanSphere Exchange. The bank currently uses Exchange to place title insurance orders and will now use the data and workflow management platform to order and track appraisals through the system. Exchange electronically connects mortgage lenders with over 25,000 services companies and provides lenders with a fast and secure way to aggregate data and centralize settlement services. Financial terms of the transaction were not disclosed.

- Capstead Mortgage Corp (CMO) declined more than 2% on Thursday, touching a session low of $8.61 a share, after the real estate investment trust cut its Q1 dividend by 15.8% compared with its most recent distribution. The upcoming $0.16 per share dividend is $0.03 per share less than Capstead's Q4 distribution and payable April 20 to common shareholders of record on March 29. The company also kept its dividend for its 7.50% Series E cumulative redeemable preferred stock (CMO.PRE) unchanged at $0.46875 per share. The Series E preferred stock dividend is payable April 16 to investors of record on March 29.

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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