Wells Fargo’s (WFC) shares are up 8% on strong volume. The bank stock should be trading down along with Citigroup (C) and Wachovia (WB).

Due to the perverse reasoning of traders, Well Fargo is fine. Its bad news is better than the bad news from its peers.

RBC Capital Markets cut its earnings estimate for WFC. The research firm lowered its third-quarter earnings forecast to $.40 from $.53, while the full-year outlook dropped to $2.07 a share from $2.20.

Unlike may other banks, that means that Wells Fargo will have earnings.

Wells Fargo said its investments in the senior unsecured notes and preferred securities are included in securities available for sale at a cost of approximately $90 million and $109 million, respectively. In the scheme of things, that exposure is modest.

There will be very few winners in the current environment. WFC is one of them.

Douglas A. McIntyre

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