Major financilal stocks ended were mired in the red as quarterly earnings reports from Goldman Sachs Group Inc. and Citigroup Inc. didn't live up to investors' lofty expectations.
Goldman /quotes/comstock/13*!gs/quotes/nls/gs (GS 186.25, +0.75, +0.40%) slipped after the company said its third-quarter earnings topped analyst forecasts, but investors may have been hoping for an even better showing after J.P. Morgan Chase & Co. /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 46.12, +0.14, +0.30%) reported a blowout quarter earlier this week.
Goldman posted quarterly profit of more than $3 billion. See full story.
/quotes/comstock/13*!xlf/quotes/nls/xlf XLF 15.33, +0.04, +0.26%
Meanwhile, Citi /quotes/comstock/13*!c/quotes/nls/c (C 4.58, +0.04, +0.88%) shares fell 5% and were the biggest decliner among the financial stocks in the S&P 500 after the troubled banking giant said its per-share loss narrowed, but it continued to book huge credit losses in the tough economic climate. See complete article.
An exchange-traded fund tracking financial stocks, Financial Select Sector SPDR Fund /quotes/comstock/13*!xlf/quotes/nls/xlf (XLF 15.33, +0.04, +0.26%) , slipped more than 1.2% in afternoon trade. The ETF jumped over 3% on Wednesday after J.P. Morgan's quarterly results easily surpassed Wall Street estimates.
Elsewhere on the earnings front, Charles Schwab Corp. /quotes/comstock/15*!schw/quotes/nls/schw (SCHW 18.32, -0.21, -1.13%) said its third-quarter net income slipped by about a third from the year-ago period. The online broker's stock fell about 5%. Read more.
In other news, shares of Capital One Financial Corp. /quotes/comstock/13*!cof/quotes/nls/cof (COF 37.36, +0.08, +0.22%) were losing ground after the credit-card firm said delinquencies and charge-offs rose in September with more borrowers in financial straits.
Shares of Invesco Ltd. /quotes/comstock/13*!ivz/quotes/nls/ivz (IVZ 23.80, +0.68, +2.94%) closed off 3.6% Thursday after Pali Research downgraded the asset manager's shares to neutral from buy. Analyst Douglas Sipkin in a research note said the stock, which closed at $23.97 on Wednesday, was essentially at his target price of $24.
"We think that for shares to move materially higher in the short term, an acquisition is becoming crucial. One transaction in particular, [Morgan Stanley's] Van Kampen, has been discussed as a target," he wrote.
Additionally, Sipkin noted Invesco's asset growth in the third quarter lagged peers. "Invesco is still one of the best-positioned managers for the long-term, just at current levels we think it is fairly valued for now," the analyst said.
CIT Group Inc. /quotes/comstock/13*!cit/quotes/nls/cit (CIT 1.19, -0.02, -1.65%) was among the few financial stocks moving strongly to the upside Thursday. The lender, which is trying to stave off bankruptcy, is in negotiations with some bondholders to amend the terms of its $28 billion debt exchange, Bloomberg reported Thursday.
Separately, Reuters reported CIT is moving closer to finalizing the terms of a new loan that would give the company $3 billion to $6.5 billion. The terms of the loan, which is being arranged by Bank of America Corp. /quotes/comstock/13*!bac/quotes/nls/bac (BAC 17.23, +0.07, +0.41%) , could be finalized as soon as this week, Reuters said.
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