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FIFTH THIRD Bancorp led financial stocks lower as the bank was subpoenaed by the Securities and Exchange Commission while the wider markets lost ground after comments from Ben Bernanke, US Federal Reserve chairman.
The Midwestern bank tumbled 4.5 per cent after announcing that it was under SEC investigation for how it accounted for, and reported, some of its commercial loans.
Elsewhere, SunTrust Banks lost 2.5 per cent while BBT fell 2.1 per cent.
The S&P index began the session higher but fell after Mr Bernanke’s testimony to the Senate Banking Committee. The Fed chairman said sustained higher oil prices “would represent a threat both to economic growth and to overall price stability, particularly if they were to cause inflation expectations to become less well anchored”.
He also gave no indication of any further measures to stimulate the economy.
Any positive sentiment was further dashed as oil prices spiked higher on concerns that the unrest sweeping across north Africa and the Middle East might spread to Saudi Arabia.
Titanium Metals was down 6.2 per cent, while AK Steel was 4.7 per cent lower. The SP materials sector was down 2.3 per cent.
Consumer services stocks were also depressed by the higher oil price and comments by Mr Bernanke. Carnival, the world’s largest cruise ship operator, was down 6.1 per cent, while Priceline.com, the online travel company, lost 1.9 per cent.
But promising economic data helped limit losses. Figures from the Institute for Supply Management showed that the US manufacturing sector had seen strong growth in February.
The index rose from 60.8 in January to 61, which is the highest reading since 2004. A number over 50 on the index indicates that the sector is growing.
General Motors reported that its sales had jumped 46 per cent in February from the same period a year ago due, primarily to a rise in demand from retail customers. Shares were down 1.7 per cent, however, as the sales figures failed to impress investors.
Ford reported that its sales had risen 14 per cent. Its stock was 2.6 per cent lower. – (Copyright The Financial Times Limited 2011)
