There’s nothing like a slap in the face from the Federal Reserve to take the shine off a stock price. Just ask investors in Citigroup Inc.
Citi shares tumbled more than 4% as trading opened Wednesday after its poor showing in the Fed's stress tests for the big banks whose failures could blow up the financial system.
Many of the giants, including Wells Fargo & Co., JPMorgan Chase & Co. and US Bancorp, were sound enough to return more of their profit to shareholders, the Fed said in its report, issued late Tuesday.
Citi, however, was not quite there yet.
Bank shares had skyrocketed earlier Tuesday, when Chase, Wells and others announced big dividend increases after passing the tests. Long-suffering Bank of America didn’t raise its dividend, but its shares rose 6% Tuesday and an additional 3% Wednesday morning on investor relief at its passing grade.