Banking, finance, and taxes
Major Financials Crushing Their Own Stocks (MER, BAC, LEH, AIG, C, WM, MS, GS)
Published:
Covering financial stocks this morning looks a bit like an assassination happening live on television. Futures are being pulled sharply lower by the financial stocks melting down. We are going to skip the individual news explanations as much of the trend now really boils down to just where these are opening up and trading at with the reduced financial models on Wall Street. S&P Futures are down over 44 points on last look. As you will see below, every major financial stock except one is gapping down:
Merrill Lynch & Co. Inc.(NYSE: MER) shares are trading up around$22 to $22.30 after a $17.05 close now that Bank of America Corp.(NYSE: BAC) is acquiring its for 0.8595 per share. BACis trading down 14% at $28.87 on this news and on exposure to otherfirms.
Lehman Brothers Holdings Inc. (NYSE: LEH) is toast and since it isfiling for bankruptcy this stock is trading down under $0.40. Sharesclosed at $3.65 Friday. This one will likely be the mostactive stock on NYSE today.
American International Group, Inc. (NYSE: AIG) is trading around $7.50this morning after closing at $12.14 Friday. The insurance giant isseeking capital and its credit default spreads are now at historichighs.
Citigroup Inc. (NYSE: C) is also feeling the wrath of traders today asit has exposure to too many of the same issues as the institutions thatare failing. Citigroup closed at $17.96 Friday and shares are around$16.50 in pre-market trading.
Washington Mutual Inc. (NASDAQ: WM) is being slammed again. Thecompany with some $50 billion in exposure to Pay-Option ARM mortgagesis down another 17% at $2.25 in pre-market trading. Many traders feelthis is the next of the big banks to fold.
Morgan Stanley (NYSE: MS) has no actual news, although Citigroupdowngraded it. But because of the exposure to Lehman and elsewhere,its shares are trading down almost 10% pre-market at $33.70.
Goldman Sachs Group Inc. (NYSE: GS) is being hit as well despite itbeing deemed the most valuable of the independent bulge bracketbrokerage firms on Wall Street. It is taking over trading operationsof Lehman on NYSE specialists. Shares are down over 7% at $142.50,barely above its $140.27 low of the last year.
The raw story here is that this is taking down just about every majorfinancial firm out there. The list of the carnage could go on and on.It isn’t even just in the U.S.
Jon C. Ogg
September 15, 2008
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