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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: Jim Spitz who wrote (36464)	10/9/2001 8:46:57 AM
From: Jim Spitz	Respond to of 37746

USB shares pounded again Dee DePass Star Tribune Published Oct 9 2001 Wall Street pounded U.S. Bancorp again Monday, sending shares down 8.5 percent following a 16 percent drop Friday, when the Minneapolis-based bank holding company said third-quarter earnings would be reduced $655 million because of problems with airline, manufacturing and transportation loans. USB shares closed at $16.88 Monday, down $1.56. The company blamed a weak economy and fallout from the Sept. 11 attacks for the earnings revision. The Standard and Poor's Bank index has dropped 8.8 percent since USB released its news Friday morning. "This was not a good day for banks," said Dain Rauscher analyst Jon Arfstrom. "We had a lot of questions [Monday] on the value of the franchise going forward. There is still value there, but this has caused people to ask questions about the value of all their financial holdings." While USB blamed the bulk of its actions Friday on the airline industry, analysts said problems for the sector obviously go beyond one industry and all are related to the weakening economy. "It's not just USB specific. But so far we haven't had other banks take a $1 billion charge. We'll see," Arfstrom said. Advantus Capital Management analyst Ben Crabtree said that USB's actions should benefit it in the long run. The bank increased its loan loss reserves by $712 million, a move that repositioned USB from a bank with one of the lowest reserve ratios in the industry to one of the highest. Sizable reserve increases in the future will be unlikely, Crabtree said. "I think it was a good decision. And if they had not had these special charges every quarter, the market would have felt better than this," Crabtree said. -- Dee DePass is at ddepass@startribune.com . © Copyright 2001 Star Tribune. All rights reserved.