Bear Stearns Plunges; Banks at Decade Lows

123jump.com Staff
10 Mar, 2008
New York City

Bear Stearns plunged 10% after rumors circulated that it faces liquidity crunch. The company denied the rumors. Banks, brokers and insurance companies are trading at their lows last seen five to ten years ago. Fears of more credit market losses dragged stocks in the banking sector to their seven year lows. Bear Stearns is trading at a level last seen in 2002, Fannie Mae is trading at 1993 level, Citigroup at 1998, Lehman Brothers at 2004 level, and Merrill reached 2000 level.

[R]2:45PM New York – Banks, brokerages, and insurance companies reach a new low after the credit market worries persisted and rumors related to Bear Stearns made rounds.[/R]

Financial stocks declined on the persistent credit market problems and lowered earnings expectations. Banks, brokers, and insurance companies led the decliners in New York trading.

Bear Stearns ((BSC)) led the sector with a sharp plunge of $6.79 to $63.39, a level last seen in the summer of 2002. Several traders reported rumors that Bear Stearns may be facing liquidity crunch. The company denied the rumors and Alan Greenberg, chairman of the executive committee in a television interviewed said the rumors and speculation was “ridiculous.”

Fannie Mae ((FNM)) dropped to a new low last seen in 1993 after it lost $3.00 to $19.77 and Freddie Mac ((FRE)) dropped to a low last seen in 1994 after it lost $2.69 to $16.97.

Citigroup ((C)) dropped to a low last seen in 1998 after it lost $1.10 to $19.81 after Morgan Stanley lowered its earnings estimates to $2.09 from $2.60 per share. Sun Trust dropped 32 cents to $54.75, a low last seen in March 2003.

Lehman Brothers ((LEH)) dropped $3.13 to $43.22 after Bloomberg reported that it plans to lay off 5% of its staff. The stock reached a low last seen in June 2004.

Merrill Lynch ((MER)) dropped $2.47 to $42.72, low last seen in January 2000. UBS ((UBS)) dropped 89 cents to $28.34, low last reached in January 2002. Credit Suisse ((CS)) lost $1.20 to $46.64, a low last seen in March 2005.

Goldman Sachs ((GS)) dropped $3.15 to $156.87, a low last seen in October 2006. Wachovia Bank ((WB)) dropped $1.00 to $26.00 a low last seen in November 2000.

Washington Mutual ((WM)) dropped 39 cents to $10.32, a level last seen in August of 1995.

Thornburg Mortgage ((TMA)) plunged 97 cents to 81 after it said that it has no capital to meet margin calls of $620 million capital. The stock was at its peak of $31.10 in April of 2004.

PMI Group (((PMI)) dropped 18 cents and reached a new low of $5.81, the mortgage insurer is under pressure as the companies in the sector find it difficult to meet their obligations and have a decline in asset qualities.