Goldman Sachs takes Merrill off their recommended list "blames it on the IPO market <ggg>"
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Brokerage Shares Drop on Uncertainty
NEW YORK (Reuters) - Shares of Wall Street's premier firms, led by Merrill Lynch & Co. Inc. (NYSE:MER - news), dropped as much as 7 percent on Tuesday because of a weak market for stock offerings and market uncertainty.
Merrill was down more sharply than its peers because a rival investment bank had dropped the stock from one of its recommended lists, market watchers said.
``Goldman (Sachs) took Merrill off their 'private client server list,' one of several recommended lists at Goldman,'' said Tim Ghriskey, a portfolio manager with Dreyfus Corp., which oversees $138 billion in assets. Goldman would not immediately respond to questions about the recommended list.
The Broker-Dealer Index (^XBD - news) was off 19.06, or 3.5 percent, at 519.02. Tuesday was the fourth down day for the index, which has shed 10 percent of its value since Wednesday.
``The overall uncertainty in the marketplace of how much the economy is going to slow, how much earnings are going to slow, (and the) IPO market slowdown,'' were all reasons A.G. Edwards analyst Diana Yates cited for the drop in brokerage shares.
Merrill shares were off $4-1/4, or 6.9 percent, at $57-3/4 in trading on the New York Stock Exchange (news - web sites). Bear Stearns Cos. Inc. (NYSE:BSC - news) was off $2-5/8 at $49-1/8, a loss of 5 percent.
Goldman Sachs Group Inc. (NYSE:GS - news) was $2-5/16 lower at $80-11/16 and A.G. Edwards Inc. (NYSE:AGE - news) was off $1-7/8 at $46-1/16.
Uncertainty surrounding the earnings of top U.S. technology companies have made for jittery stock markets, resulting in fewer companies trying to go public through initial public offerings (IPOs). Helping companies to sell the shares of their IPOs is one of Wall Street's most lucrative businesses.
``Once we get the presidential election behind us, maybe that will turn some things around,'' Yates said, referring to the U.S. presidential race, whose outcome is still in doubt. ''But when you don't have any IPOs coming to market, you can't book any revenues.'' |
