Stock Market Today, Oct. 7: Itaú Unibanco Falls on Profit-Taking After Brazil Election Rally

The Motley Fool · 1d ago

Itaú Unibanco Holding (NYSE:ITUB), a Brazil-focused universal bank, closed at $9.74, down 4.04%. Investors appeared to take profits after a Brazil-election-themed note and a multi-year high stock price. Investors will be closely watching the Brazilian runoff election round next.
Trading volume reached 40.0 million shares, coming in about 64% above its three-month average of 24.3 million shares. Itaú Unibanco Holding IPO'd in 2002 and has grown 825% since going public.

How the markets moved today

The S&P 500 (SNPINDEX:^GSPC) closed at 7,801, down 0.23%, and the Nasdaq Composite (NASDAQINDEX:^IXIC) closed at 27,539, down 0.22%. Among Brazilian diversified banking and financial services peers, Nu Holdings (NYSE:NU) closed at $15.58, down 0.51%, while Banco Santander (NYSE:SAN) closed at $13.66, down 2.50%, showing softer sentiment across the group.

What this means for investors

Yesterday, Itaú stock soared to its highest level seen in more than five years. Today's drop implies profit-taking, especially with the final results from the Brazilian presidential election still to be determined.

A runoff election will be held after no candidate won the necessary 50% majority in the first round of voting on Oct. 4. But conservative candidate Flávio Bolsonaro surprised pollsters by receiving more votes than incumbent President Luiz Inácio Lula da Silva.

That was the catalyst for a rally in Brazilian stocks, including bank names. Analysts responded with predictions that recurring net income will jump, and Itaú shares spiked to over $10 per share for the first time in more than five years.

Investors took some gains today, though, knowing that final results could still surprise election watchers.

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nu Holdings. The Motley Fool has a disclosure policy.