Financial Winners & Losers: Merrill
06/20/08 - 04:37 PM EDT
Debra Borchardt
Rumors that it would preannounce it would miss Wall Street's expectations for the second quarter hit shares of Merrill Lynch(MER Quote - Cramer on MER - Stock Picks) Friday, weighing on financial stocks..
Shares of the world's largest brokerage fell as much as 6.1% in the morning, but the stock recovered and was lately only down 4.6% to $35.95. Merrill CEO John Thain had said last week that it did not need to raise more capital. Mortgage insurer Radian Group(RDN Quote - Cramer on RDN - Stock Picks) saw its shares plummet for a second day in a row after a UBS analyst cut his price target on the stock which, combined with credit market jitters, yanked shares down 9.2% to $2.36. Mortgage lenders Fannie Mae(FNM Quote - Cramer on FNM - Stock Picks) and Freddie Mac(FRE Quote - Cramer on FRE - Stock Picks) took a beating after a Lehman Brothers analyst lowered his second quarter forecast. The losses for Fannie Mae were expected to be 68 cents per share, but the analyst increased his loss figure to $1.20. Freddie Mac's loss figure was bumped from 40 cents a share to 55 cents a share. Fannie Mae saw its shares slide 4.8% to $23.81 and Freddie sold off 7.7% to $21.82. Bank of America(BAC Quote - Cramer on BAC - Stock Picks) and Countrywide Financial(CFC Quote - Cramer on CFC - Stock Picks) both dipped as the expected closing of their proposed merger approaches. Standard & Poor's on Friday downgraded BofA shares on Friday to sell from hold as it cited worries over the quality of Countrywide's mortgage portfolio. The agency also said it expects BofA to "significantly" increase its loss provisions to reflect a weakening U.S. consumer and predicted a dividend cut. BofA dropped 3.7% to $27.10 and Countrywide fell 2.1% to $4.73.
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