{"id":52215,"date":"2023-08-23T21:14:56","date_gmt":"2023-08-24T01:14:56","guid":{"rendered":"https:\/\/ifintechworld.com\/uncategorized\/charles-schwab-shares-fall-after-announcing-cost-cutting-plan\/"},"modified":"2023-08-23T21:14:58","modified_gmt":"2023-08-24T01:14:58","slug":"charles-schwab-shares-fall-after-announcing-cost-cutting-plan","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=52215","title":{"rendered":"Charles Schwab shares fall after announcing cost-cutting plan"},"content":{"rendered":"
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\u00a9 Reuters. FILE PHOTO: The company logo for Financial broker Charles Schwab is displayed at a location in the financial district in New York, U.S., March 20, 2023. REUTERS\/Brendan McDermid\/File Photo<\/span>
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By Chibuike Oguh<\/p>\n

NEW YORK (Reuters) – Shares of Charles Schwab <\/span><\/span> (NYSE:) fell by nearly 5% to a one-month low on Tuesday after the U.S. brokerage unveiled a cost-cutting plan that came with steep one-time charges.<\/p>\n

Charles Schwab announced on Monday that it planned to layoff staff and close or downsize some corporate offices to save about $500 million.<\/p>\n

But Charles Schwab is expected to incur one-time charges of up to $500 million from the cost-cutting measure, potentially dampening its profit in the second half of this year.<\/p>\n

Charles Schwab’s stock fell as much as 5.3% to $56.26, the lowest level since July and the biggest one-day percentage drop since March. The stock, which is down 32% year-to-date, ended the session at $56.46.<\/p>\n

Charles Schwab is among brokerages and other financial firms, including State Street <\/span><\/span> (NYSE:), Northern Trust <\/span><\/span> (NASDAQ:) and Bank of New York Mellon (NYSE:), that have been facing a sharp drop in customer deposits and an uptick in unrealized fixed-income asset losses since the U.S. Federal Reserve began hiking interest rates last year.<\/p>\n

While higher rates have helped Charles Schwab and other firms earn more from interest income, the drop in deposits have drained them of a cheap source of funding, forcing them to raise new capital or cut costs.<\/p>\n

The yield on the benchmark 10-year note reached 4.366% on Tuesday, a high last seen in November 2007. Yields move inversely to bond prices, meaning the value of Treasuries held by banks on their balance sheets has fallen. <\/p>\n

“We believe the stock has declined in recent days partly from the overall pullback in the stock market and potentially from the higher 10-year Treasury rate,” Morningstar analyst Michael Wong said in an investor note. <\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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