Please ensure Javascript is enabled for purposes of website accessibility

Why Citigroup Got Crushed This Week

By John Grgurich - Apr 5, 2013 at 3:34PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's been a wild, weird five days.

As I write this, about midway through the final day of the trading week, Citigroup (C -0.17%) is down a whopping 4.34% for the week. The big banks got hammered overall, but no one else took it on the chin quite like Citi.

Tale of the tickers
Before we autopsy Citi's dreadful performance, let's have a quick look at how the superbank's peers and the markets did:

  • Bank of America is down 2.29%.
  • JPMorgan Chase is down 0.48%.
  • Wells Fargo is our winner of the week, down just 0.65%.

The markets have had a tough time of it as well, with the narrower Dow Jones Industrial Average down 0.40%, the broader S&P 500 down 1.32%, and the Nasdaq down 2.31%.

Foolish bottom line
Right off the bat, there's not a whole heck of a lot happening on the news front for Citi -- but it's always a good thing to check when a stock drops off a cliff the way Citi's did this week.

On Monday, Reuters reported that a federal judge said he would not "rubberstamp" the superbank's proposed settlement of a shareholder lawsuit alleging that Citi "hid tens of billions of dollars of toxic mortgage assets." If the settlement is overturned, it presumably means the suit could end up costing the bank more than the $590 million it was prepared to pay out, but this story isn't big enough to have caused the 4.4% drop all on its own.

What else, then? It was certainly a weird week for the four big banks overall. Everything was running relatively smoothly until Wednesday, when share prices for B of A, JPMorgan, Wells Fargo, and Citi took a nose dive. Again, there was nothing happening broadly that accounts for this pitch downwards.

With today's disappointing jobs numbers from the Department of Labor, however, expect the down markets and down banking sector to stay down. Everyone's looking for signs of economic recovery, and investors will not like hearing that the U.S. economy created only 88,000 new jobs for the month of March.

But before you let that admittedly pitiful number get you down, remember that this number is typically revised. And while that could be a revision upward or downwards, chances are it will be upward, as the ADP jobs report cited the creation of 158,000 private-sector jobs in March. 

Also remember that the markets move up and down with great caprice sometimes, and following your favorite stocks on a day-to-day basis can not only be misleading, it can be downright depressing.

Take the long view, Fools. Check in with your companies on a quarterly basis: Make sure their fundamentals remain sound, and that you still understand how they're making money, then go read a book, take your dog for a walk, or play with your kids.

Foolish investors know they're in it far into the future, and can therefore find peace among the inevitable gyrations of the markets.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Citigroup Inc. Stock Quote
Citigroup Inc.
C
$52.68 (-0.17%) $0.09

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
334%
 
S&P 500 Returns
117%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.