(Adds Schwab data, updates stock prices)
Knight Capital Group Inc.'s (NITE) August U.S. average daily
trading volume climbed 7.7% from July on a dollar basis and surged
53% from a year earlier, while Charles Schwab Corp. (SCHW) reported
a 24% rise from last year.
Investors continue to return to the market as the major stock
indexes strengthen. Although Schwab Chief Financial Officer Joe
Martinetto found the results encouraging, he noted that revenue is
under additional near-term pressure as trading activity lags
second-quarter levels and short-term interest rates continue to
fall.
Average daily trading volume handled by Schwab jumped 15% in
August from July to 334,000. Total client assets rose 3% during the
month as stock markets continued to rise and as net inflows were
$8.5 billion. The company had 61,000 new brokerage accounts, up 5%
from July, and 7.6 million in total.
Martinetto said he expects fee waivers resulting from declining
yields in the company's money market mutual funds to rise to $80
million in the third quarter from $30 million in the prior quarter.
As a result, the company expects asset-management and
administration fees to drop sequentially by up to 8% to 10%. Lower
rates also have reduced investment portfolio yields, which could
result in a 2% to 4% reduction in third-quarter net interest
revenue. Meanwhile, average daily trading volume handled by Knight
rose 5.4% in August from July to 4 million shares and doubled the
year-earlier figure.
Knight Chairman and Chief Executive Thomas M. Joyce noted August
saw U.S. equities markets remain in a summer slowdown despite
higher trading activity in "a handful of low-priced, financial
stocks." At Knight, a diversified order flow "managed to sustain
our trade volumes during the seasonal pause in activity," Joyce
said.
Knight Capital's results have been boosted in recent months by
higher volumes, particularly as its global-markets business gains
market share. Many stock-trading firms saw volume gains even as
stocks were heading lower last year, as investors generally fled
positions, leading to market volatility.
Knight Capital's shares were down 0.9% to $21.60 while Schwab
was off 2.2% at $17.96.
-By Mike Barris, Dow Jones Newswires; 212-416-2330;
mike.barris@dowjones.com