Transcripts

Washington Mutual & Wachovia's Losses Didn't Slow The Financial Sector's Gains

SUZANNE PRATT: Financial stocks soared today, despite huge losses from two big banks: Wachovia and Washington Mutual. First, Washington Mutual -- it reported a much steeper than expected quarterly loss late this afternoon. Excluding more than $2 billion in write-offs, the nation's largest savings and loan lost $3.34 a share in the second quarter, far more than the $1.05 loss that analysts had expected. But Wamu said that it has quote, sufficient capital to manage through what it calls a challenging period. However, Moody's said it is reviewing the bank for a possible downgrade. Looking ahead, Wamu expects its total residential loan losses to approach $19 billion. Some analysts had feared the number would be even worse. It was a similar story at Wachovia. The bank's shares skyrocketed more than 27 percent today, despite a quarterly loss of $8.8 billion, including over $6 billion in write-downs. Excluding those write-downs, Wachovia lost $1.27 a share in the second quarter, $0.03 better than analysts had expected. Wachovia also slashed its quarterly dividend and says it will eliminate almost 11,000 jobs.