Wachovia Falls on Downgrade, CFO Exit

The downgrade comes after Wachovia also announced late Thursday that its CFO Tom Wurtz was stepping down.

Some observers say the departure likely stems from Steel's desire to "hand pick" new top executives needed to help identify and stanch the problems there.

"The departure does create a vacancy, and therefore uncertainty, in a senior level position at a company dealing with an array of challenging issues," writes Kevin Fitzsimmons, an analyst at Sandler O'Neill & Partners, in a note Friday. "That said, we think investors, while probably not terribly surprised by the announcement, will generally conclude 'change is good' at Wachovia. [I]t signals that Mr. Steel is moving swiftly to get his own person (or people) in place to put together and implement the battle plan for overhauling Wachovia."

Investors may also view the move as an extension of accountability, Fitzsimmons added, given that Wurtz was CFO in 2006 -- the year that Wachovia bought Golden West.

Wachovia shares, which slipped as low as $14.14, were recently down 7.9% to $14.45.