Why Charles Schwab Stock Tumbled on Thursday
Beware of faint praise from an equity analyst: It can often trigger a sell-off in a stock. That's what happened Thursday with Charles Schwab (NYSE: SCHW) when investors disseminated news of a prominent bank initiating coverage of the brokerage with a rather "blah" recommendation. Schwab lost nearly 3% of its value across that trading session, comparing unfavorably to the 0.8% rise of the S 500 index on the day.
No less an institution than mighty U.S. lender Wells Fargo launched coverage of Schwab. The bank's Michael Brown set his recommendation at equal weight (read: Hold) at a price target of $70 per share.
It wasn't immediately clear why Brown only has a neutral stance on the brokerage, but it didn't help with the generally gloomy investor sentiment that has descended recently. In mid-August, institutional investors Toronto-Dominion Bank sold 40.5 million shares of Schwab. While that sale had more to do with the bank strengthening its fundamentals, it wasn't exactly an indicator of confidence in its Schwab investment.
Source Fool.com
