Financial Stocks Plunge Amid Fee Hikes and Revenue Loss

Strategic Insights -

Financial shares are experiencing a significant downturn in late trading as Bank of America (BAC) and other major institutions implement fee hikes to compensate for revenue lost from the failed attempt to charge for debit card use. The Dow Jones U.S. Financial Index has taken a 2.71% hit, plummeting to 221.18. Bank of America's shares are down 2.82%, while Citigroup (C) and U.S. Bancorp (USB) have suffered losses of 4.1% and 2.3%, respectively. The fees, which include extra charges for services like ATM withdrawals and paper statements, are a desperate attempt by these companies to recoup losses.

Key Takeaways:

  • The Dow Jones U.S. Financial Index has plummeted 2.71% to 221.18, with a significant impact on major financial stocks.
  • Bank of America (BAC) shares are down 2.82% to $6.03, while Citigroup (C) has suffered a loss of 4.1%.
  • U.S. Bancorp (USB) shares have declined by 2.3%, despite efforts to implement fee hikes.
  • Credit Suisse (CS) shares have dropped 4.08% to $24.01 following a downgrade review by Moody's.
  • The failed attempt to charge for debit card use has led to significant revenue losses, prompting banks to implement fee hikes.
  • The fees are aimed at compensating for lost revenue, with services like ATM withdrawals and paper statements facing additional charges.

Statistics:

  • The Dow Jones U.S. Financial Index declined by 2.71% to 221.18.
  • Bank of America (BAC) shares dropped 2.82% to $6.03.
  • Citigroup (C) suffered a 4.1% loss while U.S. Bancorp (USB) declined 2.3% in late trading.
  • Credit Suisse (CS) shares fell 4.08% to $24.01 following a downgrade review.

Sources:

  • MidnightTrader via COMTEX (November 14, 2011)
  • The New York Times (report on failed debit card fee attempt)
  • Comtex SmarTrend Alert (October 27, 2011, BAC uptrend; November 10, 2011, C downtrend; November 9, 2011, CS downtrend)