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Wednesday's Bank Stocks: 'Momentum trade based on hope'

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Wednesday's Bank Stocks: 'Momentum trade based on hope'

Bank and thrift stocks, as well as the broader markets, closed lower Wednesday, Dec. 21.

Lou Brien, market strategist at DRW Trading Group, thinks that it is a "momentum trade based on hope" following the election of Donald Trump. He noted that though market performance is strong, the market is not exactly dealing with facts. "We are not really dealing with facts as we don't know exactly what the new administration will do," he added.

Further, he thinks different factors could affect the market going forward, such as the relations of the United States with other countries, both in trade and geopolitics, in the first couple of months of President-elect Trump's administration.

The SNL U.S. Bank Index was down 0.26% to 538.91, and the SNL U.S. Thrift Index fell 0.78% to 966.41. The Dow Jones Industrial Average decreased 0.16% to 19,941.96, the S&P 500 slid 0.25% to 2,265.18 and the Nasdaq composite index was 0.23% lower to 5,471.43.

Westbury, N.Y.-based New York Community Bancorp Inc. lost 4.90% to $15.93 while Lake Success, N.Y.-based Astoria Financial Corp. added 4.18% to $18.93, a day after the two New York-based thrifts mutually terminated their merger.

BB&T Corp.'s stock slid 0.52% to $47.40 by the end of business. The FDIC and the North Carolina Commissioner of Banks issued a consent order to BB&T's unit Branch Banking and Trust Co. over internal control deficiencies related to its Bank Secrecy Act and Anti-Money Laundering compliance program.

The biggest names in the banking scene were mixed. JPMorgan Chase & Co. inched up 0.25% to $86.75, Wells Fargo & Co. lost 0.70% to $55.71, Citigroup Inc. retreated 0.08% to $60.75 and Bank of America Corp. declined 0.35% to $22.63.

Among other notable movers, Atlantic Capital Bancshares Inc. climbed 4.51% to $18.55, and Republic First Bancorp Inc. added 3.53% to $8.80. Meanwhile, Cardinal Financial Corp. dropped 4.22% to $32.46, and Equity Bancshares Inc. slid 3.49% to $33.78.

In economic news, existing home sales were up for the third consecutive month in November, at the highest sales pace since February 2007, according to the National Association of Realtors. Total existing-home sales rose 0.7%, seasonally adjusted, to 5.61 million in November, from 5.57 million in October, and were 15.4% higher than a year ago.

Mortgage applications increased 2.5% on a seasonally adjusted basis for the week ended Dec. 16, according to the Mortgage Bankers Association's Market Composite Index. On an unadjusted basis, mortgage applications were also up week over week with a 2% gain.

Market prices and index values are current as of the time of publication and are subject to change.