Down and Out on the Street: Merrill Warning a Bleak Sign for Brokers
Merrill Lynch (MER Quote) rattled the financial sector with a dismal second-quarter outlook Tuesday, but the news likely means even worse things are in store for the rest of the broker pack.
That's because Merrill Lynch reports its quarterly results about a month after most of the other brokers, including Goldman Sachs (GS Quote), Morgan Stanley (MWD Quote) and Bear Stearns (BSC Quote). Those firms, whose second quarters ended in May, reported lackluster numbers last week.
But if those brokers are experiencing the same problems as Merrill, which is likely, then Merrill's warning indicates that the first month of their current quarters has been lousy, setting the stage for a poor quarter. Merrill said its second-quarter results, which will be released July 17, will be as much as 37% below the consensus expectation of 82 cents largely due to weak stock trading volumes and lower volatility.
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