Despite expectations, Wells Fargo has announced that their credit improved in the force quarter of 2010, and that their losses were much less than had been predicted. Many experts are calling the positive news a sign that American financial institutions are on the road to recovery, along with the economy as a whole.
According to the Associated Press, Wells Fargo & Co. said Wednesday its first-quarter earnings fell 1 percent to $2.37 billion as the bank dealt with continuing losses on consumer loans. It also originated fewer mortgages compared to a year earlier as refinancing activity trickled off.
However, the bank said it believes it has "turned the corner" with its credit problems.
The results surpassed expectations and provided further evidence that the banking industry and the economy are recovering. Wells Fargo rose in early trading and hit a new 52-week high of $34.25, but was down 62 cents, or 1.9 percent, at $33.06 by midday.
Investors appeared to have doubts about consumers' ability to pay their bills because many banks are still reporting a high number of loan defaults.
San Francisco-based Wells Fargo joined other big banks in the most recent quarter in reporting improvement in their consumer loan businesses.