NEW YORK (Thomson Financial) - Shares of financial companies fell for a
second session after Moody's Investors Service Friday put Morgan Stanley's
credit on review for downgrade.
The SPDR FD Financial ETF (XLF) fell 1.4%, or 26 cents, to $20.31 in morning
trade. Earlier, the ETF hit a five-year low of $20.13. The losses came despite a
46.49 points rise in the Dow Jones Industrial Average to 11,393.82. The Dow
earlier fell to 11,288, entering bear market territory.
Shares of New York-based Morgan Stanley sank 1%, or 35 cents, to $36.37,
above the three-month intraday low of $36.07 reached Friday.
Moody's said it put Morgan Stanley's Aa3 long-term senior unsecured debt
rating on review for a possible downgrade. The Prime-1 short-term rating was
affirmed. The "more likely outcome" of the review is a 1-notch downgrade to A1,
Moody's said.
Moody's said it will monitor Morgan Stanley's risk management and its
ability to contain losses in its commercial real estate and single-name
leveraged loan portfolios.
Among Morgan Stanley's brokerage peers, shares of Lehman Brothers slid 3%,
or 80 cents, to $21.45. Merrill Lynch & Co. declined 1.4% to $32.27, after
earlier hitting a fresh five-year low of $31.87.
Goldman Sachs Group Inc., the lone bright spot, rose 1% to $175.69.
Within the banking sector, Citigroup Inc., a component of the Dow
industrials, tumbled another 3% to $16.67 after reaching $16.61, replacing
Friday's nadir as their lowest level since Oct. 1998.
Fellow Dow member J.P. Morgan Chase & Co. slipped 2% to $34.42. The stock
earlier fell to $33.96, a new three-year low.
Bank of America, which announced 7,500 job cuts last week, also slipped 2%
to $24.24. Earlier Monday, the stock fell to $24.17, its lowest level since
March 2001.
Michelle Rama
mr/vj
COPYRIGHT
Copyright Thomson Financial News Limited 2007. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content,
including by framing or similar means, is expressly prohibited without the prior
written consent of Thomson Financial News.
|