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Friday's Bank Stocks: Markets slide after weaker-than-expected jobs report


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Friday's Bank Stocks: Markets slide after weaker-than-expected jobs report

Banks stocks closed in negative terrain along with broadermarkets Friday, Oct. 7, after the latest jobs report showed little change innational employment.

The U.S. employment picture did not change significantly inSeptember, as the economy added 156,000 nonfarm payroll jobs during the month. Theunemployment rate ticked up to 5.0%. Economists had expected thenation to add 168,000 jobs during the month, according to Econoday dataavailable from Bloomberg.

Lindsey Piegza, chief economist of Stifel Nicolaus &Co., said that the report was significantly below expectations and "reallycalled into question whether or not the labor market is on relatively firmfooting."

"It is very clear that over the past nine months, whilethe Fed was hoping the data [would] improve, the labor market has actuallyshown a significant deterioration," Piegza said, noting that she does notexpect another rate hike before 2017.

Jim O'Sullivan, chief U.S. economist at High Frequency Economics,on the other hand, thinks that the next rate hike might still happen inDecember.

"Overall, I think the economy is chugging along prettywell, even though some parts from today's report were slightly weaker thanexpected," he said. He noted that two more employment reports will comeout before the Federal Open Market Committee meets in December.

O'Sullivan added that Friday's employment report was not amarket mover. "If you look at what happened in the hour after it wasreleased, in both the bond market and stock market, they couldn't make up theirmind about which way to go," he said.

The SNL U.S. Bank Index finished the day down a slight 0.01%to 423.83, and the SNL U.S. Thrift Index decreased 0.22% to 824.98. The DowJones Industrial Average declined 0.15% to 18,240.49, the S&P 500 retreated0.33% to 2,153.74, and the Nasdaq composite index was down 0.27% to 5,292.41.

Among large-cap banks, Wells Fargo & Co. ticked up 0.33% to $45.33,JPMorgan Chase &Co. was up 0.35% to $68.11 and Citigroup Inc. gained 0.43% to $49.28, while slid 0.55%to $16.13.

Among smaller banks, Tappahannock, Va.-based climbed 4.12% to $8.34, while Canfield, Ohio-based fell 2.04%to $10.58, and San Juan, Puerto Rico-based First BanCorp. dropped 2.76% to $5.29.

In the thrift space, Westbury, N.Y.-based wasdown 0.85% to $14.01, Lake Success, N.Y.-based fell 0.96% to$14.37, and San Diego-based BofIHolding Inc. added 1.21% to $22.66.

Market prices andindex values are current as of the time of publication and are subject tochange.