Wednesday's Winners & Losers: Moody's
A computer glitch at Moody's (MCO) caused shares of the bond ratings company to plunge Wednesday and sent other financial stocks down as jittery investors began selling.
Moody's experienced a problem that caused some complex European financial instruments to be doled out higher ratings than they should have been given, according to Reuters. The error was discovered in early 2007 and the products were downgraded, but the news was never disclosed. The stock collapsed into its largest one-day drop since being spun off from Dun & Bradstreet. It ended the day down $6.99, or 15.9%, at $36.91.
Shares of Hewlett-Packard
Washington Mutual (WM) gave back 4.4% to $9.40 after Moody's downgraded the rating on its covered bonds. This acion follows the recent downgrades of the senior unsecured debt of Washington Mutual Bank. The concern from Moody's is the increased potential exposure of covered bond investors to the risk of a liquidation of the cover pool in a short time frame in the event of a default.Analog Devices
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