Financials Rebound as Wells Fargo (WFC), Morgan Stanley (MS) Earnings Are 'Not as Bad' as Expected
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After initially trading well into negative territory before the opening bell rang this morning, financial stocks have now rebounded and are currently holding onto gains. The Financial Select Sector SPDR ETF (NYSE: XLF), a popular fund which gives a sector-wide view of financial stocks, was down as much as 4% earlier, but has swung 6% and is now trading nearly 2% higher.
Today, traders are responding to Q1 results out of both Wells Fargo (NYSE: WFC) and Morgan Stanley (NYSE: MS).
Wells Fargo reported quarterly EPS of $0.59, excluding the impact of a charge, about 18 cents better than the Street had been expecting. The bank also beat the Street on sales, reporting $21 billion compared to the consensus of $19.37 billion.
As for Morgan Stanley: the bank reported a Q1 loss of $0.57, wider than the $0.08 loss analysts had been looking for. Also, quarterly revenue came in at $3 billion, a 62% drop from the same quarter last year. Morgan Stanley also said it will cut its quarterly dividend from $0.27 to $0.05 per common share. Based on yesterday's closing price, the dividend yield falls from 4.38% to 0.81%. MS said it would retain about $1 billion annually due to the dividend cut.
Shares of Wells Fargo, after trading down about 4% this morning, are now trading up more than 7% to $20.19. Meanwhile, shares of Morgan Stanley have surged about 6% from the lows of the morning, but are still trading in negative territory, currently down 2.8% to $23.96.
Elsewhere in the sector:
Today, traders are responding to Q1 results out of both Wells Fargo (NYSE: WFC) and Morgan Stanley (NYSE: MS).
Wells Fargo reported quarterly EPS of $0.59, excluding the impact of a charge, about 18 cents better than the Street had been expecting. The bank also beat the Street on sales, reporting $21 billion compared to the consensus of $19.37 billion.
As for Morgan Stanley: the bank reported a Q1 loss of $0.57, wider than the $0.08 loss analysts had been looking for. Also, quarterly revenue came in at $3 billion, a 62% drop from the same quarter last year. Morgan Stanley also said it will cut its quarterly dividend from $0.27 to $0.05 per common share. Based on yesterday's closing price, the dividend yield falls from 4.38% to 0.81%. MS said it would retain about $1 billion annually due to the dividend cut.
Shares of Wells Fargo, after trading down about 4% this morning, are now trading up more than 7% to $20.19. Meanwhile, shares of Morgan Stanley have surged about 6% from the lows of the morning, but are still trading in negative territory, currently down 2.8% to $23.96.
Elsewhere in the sector:
- Citigroup (NYSE: C) now trading 2.5% higher after falling as much as 5% this morning.
- Bank of America (NYSE: BAC) now trading 3.5% higher after trading down as much as 5%.
- Goldman Sachs (NYSE: GS) currently up 1% after dipping more than 2% earlier.
- JPMorgan (NYSE: JPM) up 3.4% following a 2.8% drop this morning.
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