Wells Fargo passes Citigroup in market value

By Jonathan Stempel

WASHINGTON (Reuters) - Wells Fargo & Co (WFC.N: Quote, Profile, Research) displaced Citigroup Inc (C.N: Quote, Profile, Research) on Monday as the third-largest U.S. bank by market value, reflecting persistent investor worries about the latter's business prospects.

Citigroup's market value was about $98.8 billion on Friday, $5 billion more than Wells Fargo's, according to Reuters data. By assets, Citigroup ranks first, while Wells Fargo is fifth.

But Citigroup shares fell as much as 9.1 percent as investors worried that the collapse of Bear Stearns Cos BSC.N, which agreed Sunday to a $2-per-share buyout by JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) could foreshadow more credit and liquidity problems at other financial services companies.

Bank of America Corp (BAC.N: Quote, Profile, Research) and JPMorgan are the largest U.S. banks by market value.

In afternoon trading, Citigroup shares were down $1.49, or 7.5 percent, at $18.32, giving the bank a market value of about $91.3 billion. Wells Fargo shares fell 19 cents to $28.26, giving it a market value of about $93.2 billion.

"I'm not sure what inferences you should draw," said Marshall Front, chairman of Front Barnett Associates LLC in Chicago, which owns both banks' shares. "Changes in market psychology toward an individual company can have a disproportionate impact on market value over a short period of time."

Citigroup spokesman Michael Hanretta declined to comment.

Wells Fargo spokeswoman Julia Tunis said her bank is focused on its customer needs, "and if we do that then everything else -- including the value of our stock -- takes care of itself over time."