The S&P 500 gives up its opening gains and falls into negative
territory. Weakness in financials (-3.4%) is acting as the main drag.
Bank of America (BAC 28.07, -4.16) is down 13% after last night
preannouncing third quarter earnings that fell short of expectations.
BofA, the second largest U.S. financial firm by market cap after
JPMorgan Chase (JPM 42.66, -1.34), is cutting its quarterly dividend by
50% to $0.32 and plans to raise $10 billion in a common stock offering.
BofA made the moves to shore up its capital due to the current economic
environment.
In other financial news, Wachovia (WB 5.75, -0.03), Citigroup (C 16.92,
-0.49), and Wells Fargo (WFC 33.38, -0.31) announced last evening they
have agreed to halt all litigation. The dispute stems from Citi's
allegations that Wachovia violated exclusivity talks by agreeing to
merge with Wells Fargo. Citi had filed a suit claiming $60 billion in
damages from Wachovia and Wells Fargo.