This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Writedown Talk Whipsaws Citi

Updated from 1 p.m. EDT

Another round of writedown talk sent brokerage stocks reeling for a second straight day Friday.

Merrill Lynch (MER) plunged as much as 11% on news reports that the firm faces regulatory scrutiny over its handling of potential losses on mortgage-backed securities. The news, along with the latest downgrade from Deutsche Bank analyst Mike Mayo, sent shares down 3% and more across the brokerage sector.

Mayo said Merrill and Citigroup (C) could together take $8 billion in further mortgage-related writedowns in the fourth quarter. Merrill shares have been sinking ever since last month's disclosure that the firm would have to take billions of dollars in writedowns on its holdings of collateralized debt obligations, the esoteric debt whose collapse has left financial firms across the world wallowing in losses.

Also Friday, Goldman Sachs (GS) tumbled 6% on unconfirmed rumors that the firm faces a big writedown of its own. Goldman said the rumors are "untrue," but the notion that the big firm is under scrutiny unnerved investors. Goldman shares had been the standout in the brokerage group, hitting a 52-week high on Halloween as investors celebrated the firm's achievement in posting record third-quarter results back in September.

But the good cheer evaporated Friday, as firms across Wall Street shared in the pain of renewed stock-market declines. Bear Stearns (BSC), Morgan Stanley (MS), Lehman Brothers (LEH), JPMorgan Chase (JPM) and Citigroup each dropped between 3% and 4%.

The selloff has renewed pressure on CEOs whose firms have incurred steep losses as a result of this summer's credit crunch and mortgage industry deterioration.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,932.62 +13.03 0.08%
S&P 500 1,982.61 +1.01 0.05%
NASDAQ 4,522.20 -5.3140 -0.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs