SAN FRANCISCO (MarketWatch) — Shares of Bank of America Corp and First Horizon National Corp. weighed on the financial sector Thursday following a busy day of earnings releases.
Morgan Stanley results top forecasts
Morgan Stanley swings to a first-quarter loss as the investment bank shoulders heavy losses tied to changes in the value of its debt, but other key measures top forecasts.
Bank of America BAC, -0.94% shares closed down 1.7% as results showed first-quarter profit slumped 68% after the Dow Jones Industrial Average component accounted for debt-related charges. Earlier in the day, shares were up as much as 2.8%. Read “Big-bank earnings go out with a whimper.”
Bank of America had a profit of $653 million, down from $2.05 billion earned in the first quarter of 2011, as per-share earnings fell to 3 cents from 17 cents. The latest quarter included, among other items, a $4.8 billion pre-tax hit tied to changes in the value of the bank’s debt. See full MarketWatch coverage of Bank of America
The worst performer in the sector, and the S&P 500 Index, was First Horizon National Corp. FHN, -0.84% with shares closing down 7.8%.
First Horizon reported a 24% decline in earnings on a rise in loan-loss provisions. Read more on First Horizon.
Other banks were down following the release of earnings.
Dow DJIA, -0.58% component Travelers boosted its dividend Thursday as first-quarter profit exceeded analyst expectations and the company continued to raise prices.
Shares of the firm, one of the largest insurers of U.S. businesses, closed up 3.8% at $61.70. Read more on Travelers.
Shares of Morgan Stanley MS, -2.04% closed up 2.3% at $18.07 after the firm reported first-quarter financial results that topped analysts’ consensus estimates.
Morgan Stanley reported a loss of $94 million, compared with a year-earlier profit of $968 million. On a per-share basis, which reflects the payment of preferred dividends, the bank reported a loss of 6 cents compared with a profit of 50 cents a year ago.
Stripping out a $2 billion impact tied to changes in the value of the bank’s debt, the bank booked a per-share profit of 71 cents. Analysts polled by Thomson Reuters had expected earnings of 44 cents a share, excluding the debt-related adjustment. Read more on Morgan Stanley.
In the broader market, the Financial Select Sector SPDR ETF XLF, -0.61% which tracks the financial stocks in the S&P 500 Index SPX, -0.44% SPX, -0.44% fell 0.5%. The KBW Bank Index BKX, -0.55% which tracks the 24 leading U.S. banks, fell 0.8%.
After market close Thursday, Capital One Financial Corp. COF, -0.62% rose 2% in after-hours activity after posting a profit of $2.74 a share, or $1.56 a share excluding a gain from acquiring ING Direct. Shares had closed down 0.6%. Read more on Capital One.