Fresh credit fears as S&P cuts US bank ratings

S&P lowered ratings for Morgan Stanley, Merrill Lynch and Lehman Brothers, citing a negative outlook for all three banking giants. Lehman Brothers took the hardest hit, its share price fell 8.1% after S&P downgraded its long-term rating from A+ to A. S&P says the effects of March’s difficult operating environment will only be reflected in Lehman's Q2. “We expect a relatively meaningful deterioration in Lehman's second-quarter performance owing to a generally slower business environment, additional write-downs on certain troubled exposures, and the negative effects of hedges due to bas...