With speculation mounting over Citigroup’s future, investment pros are worried that the bank’s problems signal that the market is not near a bottom—but ready to fall further.
Anxiety ran high Friday as Citigroup’s stock [C 3.77 — UNCH (0) ] continued to tumble even after CNBC reported that the bank is considering several options to shore up confidence, including finding a merger partner.
Other Wall Street giants like JPMorgan Chase [JPM 22.72 — UNCH (0) ] and Goldman Sachs [GS 53.31 — UNCH (0) ] also saw investors scrambling for the exits.
“It’s very stressful,” says Kathy Boyle, president of Chapin Hill Advisors in New York. “I don’t know if this is an inflection point. I think it’s just one more nail in the coffin.”
Citigroup’s stock isn’t out of the woods yet, either. If its share price remains below $5, as it has since Thursday, that could trigger a major selloff by pension funds, mutual funds and other institutional investors that aren’t allowed to own stocks below that level.
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