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(Updated from 3 p.m.)

Brokerage stocks slid Tuesday on fears that the slowing economy will lead to a decrease in trading. A couple of negative reports from Wall Street research analysts also dragged financial stocks lower.

Stocks across the financial landscape were falling. The

American Stock Exchange Broker/Dealer Index

was recently losing 4.9%. Tracking the banking industry, the

Philadelphia Stock Exchange/KBW Bank Index

was off 3.6%. And the

S&P Insurance Index

was 2.2% lower.

CIBC World Markets

said in a note from analyst Ken Worthington that "continued weakness in the equity markets and advisory environments" continue to cause concern among financial firms.

And

Keefe Bruyette & Woods

issued a number of ratings changes, saying in a research note that "market volatility and economic uncertainty appear to be taking their toll on the retail segment of the brokerage business.''

Lehman Brothers

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fell $6.04, or 7.6%, to $73.10 and

Charles Schwab

(SCH)

dropped $1.19, or 5.2%, to $21.80 in recent trading on the

New York Stock Exchange

.

Morgan Stanley Dean Witter

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dipped $5.25, or 7%, to $69.50, and

Merrill Lynch

(MER)

lost $3.65, or 5.5%, to $63.22.

The losses were widespread. Banking giant

JP Morgan Chase

(JPM)

was down $1.73, or 3.3%, to $50.26 and online broker

E-Trade

(ET)

declined 67 cents, or 5.4%, to $11.78.

Ameritrade

(AMTD)

stumbled 41 cents, or 4.5%, to $8.56 on the

Nasdaq

.