Financials Turn Lower after Draghi comments (XLF, C, MS, BAC, GS, HIG, AIG, IRE)

Published on Monday, 19 December 2011 13:33 Written by Paul Oldrini

New York, December 19th (TradersHuddle.com) – Financial stocks turned sharply lower in the afternoon session after opening with modest gains as the European Central Bank chief made various pessimistic comments on the ongoing crisis in the euro-zone crisis. Mario Draghi continued to focus the importance of a tighter fiscal union among European nations. He also said that the central bank wouldn’t be more active in bond purchasing to help the debt-crisis. Moreover, he called the economic outlook highly uncertain. Financial Select Sector SPDR (ETF)(NYSE:XLF) was recently trading lower by 1.95% to $12.31, near to session low of $12.28, while S&P 500 slid 0.64% to $ 1,211.87.

A large number of blue chip financial stocks continued to slid with Citigroup Inc.(NYSE:C) leading the loser and slumped 4.65% to $24.82, although off session low of $24.40. - Primerica announced that Citigroup has sold about 8 million shares of Primerica's common stock

Morgan Stanley (NYSE:MS) and Bank of America (NYSE:BAC) were also falling sharply with a fall of 4.75% and 3.37% respectively. Analysts at Nomura reduced their price target on the stock by $1 to $7, while for Morgan Stanley the price target was trimmed by 10% to $18.

Goldman Sachs Group (NYSE:GS) was also downgraded by Nomura, which reduced its price target to $130 from $141. The stock is trading lower by 2.72%.

Small regional banking stocks continued to show weakness with Hartford Financial  (NYSE:HIG) slid 2.50% and American International Group (NYSE:AIG) slumped 3.13%.

Bank of Ireland (ADR) (NYSE:IRE) fell 3.37% to $4.02 and made a new 52-week low of $3.99. It has agreed to divest U.K.- based lender Burdale to Wells Fargo & Company(NYSE:WFC) for around €690M ($899M), bringing BOI closer to its target of selling €10B in assets under an EU-IMF bailout.