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Wells Fargo's stock draws a sharp U-turn after warning of a surprising net interest income



Shares of Wells Fargo & Co. took a reverse course in trading on Friday, fluctuating at a sharp loss from a healthy profit, after the bank lowered its net interest income outlook, referring to an unfavorable environment and an increasingly competitive marketplace.

stock

WFC, -2.76%

was up to 2.2% at an intraday high of $ 48.82, which was reached at 10:13 am after the bank reported earnings and revenue in Q1 less than expected.

The inventory then pulled a sharp U-turn into active trading after the start of the conference after earnings with analysts, so it fell as much as 3.5% to an intraday low of $ 46.06 at 1

0:45. am The stock market has since paired some losses to be 3.3% around midday.

The trading volume fluctuated to over 40 million shares over the average day's average of about 24 million shares.

FactSet, MarketWatch

The sharp sale took place after CFO John Shrewsberry, that 2019 net interest income (NII) is now expected to fall 2% to 5% from a year ago compared to previous management with a 2% decline to an increase of 2%. It was a surprise to investors, as the FactSet NII consensus of $ 51.15 billion represents an increase of 1.0%.

"Several factors have driven a shift in our perception, including a lower absolute rate outlook, a flatter curve, tightening lending spreads due to a competitive market with ample liquidity and continued upward pressure on deposit pricing," Shrewsberry said in a transcript from FactSet.

Wells Fargo's stock was the biggest loser of the three components of the SPDR Financial Select Sector listed fund

XLF, + 1.84%

losing the soil. In contrast to J.P. Morgan Chase & Co.'s stock

JPM, + 4.45%

which rose 4.4% to put the other 65 components in motion after the bank reported a surplus and revenue in Q1 rising expectations.

Also on the record -earnings call, the company gave no indication as to when a new CEO could be named, following the surprise announcement last month that former CEO Tim Sloan was retiring.

Don't miss : Warren Buffett approved Tim Sloan & # 39; 100% & # 39; – minutes later, Wells Fargo broke the CEO.

"Although I am available to the board for any necessary consultation or somehow they need me in the process, I am not involved in the search process, so unfortunately I do not have an insight into the criteria they apply to their work , or the timetable they are thinking of In completing this work, interim consultant C. Allen Parker said on the call.

So far, the Wells Fargo stock has reached a 0.4% increase while the financial ETF has risen 13 , 3% and the S & P 500 index have rallied 15.7%.


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