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Published April 21, 2008 at 1:05 PM
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 The financial sector was in the forefront of investors' minds once again, as concern about disappointing earnings results from Bank of America Corp. [BAC] and National City Corp. [NCC] pervaded the markets Monday, but both have devised plans to raise more capital to strengthen their balance sheets. Overall, the Dow fell 54.31, or 0.4%, to 12,794.89 as the Nasdaq was down 3.90, or 0.2%, to 2399.07 in Monday midday trading.
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- BofA slipped 56 cents, or 1.45%, to $38.00 as the company disappointed the Street announcing a 77% fall in first-quarter earnings to $1.21 billion, or 23 cents a share, as its provision for credit losses climbed and it posted $2.72 billion in net charge-offs. The Financial Times says the full-service bank will try to raise more capital and to reverse the downward trend by divesting its 9% stake in China Construction Bank. BofA paid $3 billion in June 2005 for the 9% stake with the option to increase its stake to 19.9% over the next five and a half years. The earnings miss does not bode well for BofA proponents of the acquisition of Countrywide Financial Corp. Many wonder, will the proposed Countrywide deal spur BofA to make more divestitures to offset the eventual assimilation of the struggling lender?
- Meanwhile, National City lost $2.09, or nearly 25%, to $6.25 as the Midwestern regional bank announced it would raise $7 billion from private equity firms led by Corsair Capital LLC. The capital infusion will be needed to help reverse a loss of $171 million, or 27 cents per diluted share, in the first quarter of 2008. This loss follows a bigger loss of $333 million, or 53 cents a share, in the fourth quarter of 2007.
- Gerald Magpily
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