American Express shares tumble to 5-year low

The stock tumbled $1.50, or 3.7 percent, to $39.44 in afternoon trading. Earlier in the session, shares bottomed out at $38.90, a level not seen since July 2003. The stock is down 21 percent year to date.

After announcing Wednesday that it will be getting $1.8 billion from MasterCard Inc. in settlement of an antitrust suit, American Express said it has underestimated how quickly its cardholders are falling behind on their debt.

In a note to clients, Friedman, Billings, Ramsey & Co. analyst Scott Valentin reiterated an "Underperform" rating on the stock, adding that he believes management will need to lower its expectations for earnings-per-share growth, as losses increase and spending slows.