Fresh credit fears as S&P cuts US bank ratings

clock

Shares in US investment banks fell sharply yesterday as a number of Standard & Poor's (S&P) credit downgrades sparked fears of fresh write-downs and further losses in second quarter trading.

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...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

FCA proposes 'targeted and proportionate' changes to listing rules for closed-ended funds

FCA proposes 'targeted and proportionate' changes to listing rules for closed-ended funds

Consultation runs into August

Michael Nelson
clock 26 June 2026 • 5 min read
Big games, big names… and smaller companies

Big games, big names… and smaller companies

'Brazil should be looking to the future rather than to the past'

Gabriel Sacks
clock 22 June 2026 • 4 min read
Why should investors back China in the worldwide robotics race?

Why should investors back China in the worldwide robotics race?

The race to identify Asia's hidden gems

Xin-Yao Ng
clock 19 June 2026 • 5 min read