Birds of a feather flock together. And that adage was on display today as the Big Four banks struggled to maintain their altitude. But by the end of trading, one stood out among the flock and closed in positive territory — Wells Fargo & Co (NYSE:WFC). Warren Buffett’s favorite stock was light on news today, but still felt the sting of an uncertain market’s attitude toward the banks. Though it spent the majority of the day in the red, Wells broke through the loss to a modest 0.44% gain by closing.
Going with the crowd
There were a few sound bites that took bank stocks down today, first being continued drops in the Japanese and other Asian markets. As we learned in the past weeks, Asian market weakness is a concern for bank investors. With Citigroup Inc (NYSE:C) generating nearly 20% of its revenue in Asian operations, it is more exposed to the slowing economies of that market than any other bank. Both Bank of America Corp (NYSE:BAC) and JPMorgan Chase & Co. (NYSE:JPM) have Asian segments as well, but their total revenue is only reliant on that area for 4% and 6%, respectively.
Even though the Japanese Nikkei index lost another 3%+ in trading, Wells Fargo & Co (NYSE:WFC) investors shouldn’t lump it in with the remainder of the Big Four. With a more traditional approach to banking, Wells Fargo & Co (NYSE:WFC) has little international exposure.
Today was a big day for Bank of America Corp (NYSE:BAC) shareholders, as they wait to hear what a court will decide on a pending settlement with investors. The uncertainty that the bank’s legal issues generates can spread to its compatriots, which may have happened today. Down 3.3% before noon, Bank of America may have soured the market for banks, though it recovered to within a single percentage loss for the day.
Wells Fargo is paired with BAC in a legal dispute surrounding last year’s $25 billion mortgage settlement. Since there is uncertainty revolving around one BAC case, it makes sense that investors might feel shaky about all of them. And since Wells Fargo & Co (NYSE:WFC) may be in the same (albeit smaller) boat as Bank of America Corp (NYSE:BAC), it lends to a down day for both.
Obviously since Wells Fargo & Co (NYSE:WFC) ended the say in the green, investors have no reason to worry. And if you focus on WFC-centric information, there’s more to be happy about.