Talk about your rough Monday mornings. The Dow Jones Industrial Average (DJIA 13,508.0) stumbled out of the gate, dropping more than 100 points in the first 3 minutes of trading. The main reason for the drop was the flurry of news from Dow component, Citigroup, which has dropped more than 4% within the first 30 minutes of trading.
The departure of Citigroup's CEO Charles Prince was cited as the reason for an upgrade to market perform. The brokerage noted that, since investors have been clamoring for [Prince's] resignation, it is likely that they will view his stepping aside as a positive event for the company. Moreover, a second major write-down and reserve addition is likely to calm fears of unknown events causing disarray with the firm's capital. Plus, the maintenance of the dividend will add confidence. Prince's departure is seen as a major negative for Citigroup, as he helped turn the company around during his 4-year tenure. Former U.S. Treasury secretary and Goldman Sachs co-head Robert Rubin will become chairman and Win Bischoff, head of Citigroup's European are will serve as interim chief executive.
According to CNBC, the brokerage is mulling over offering its vacant CEO position to Blackrock's Larry Fink.