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UPDATE: S&P Issues Negative Actions on Investment Banks (LEH, MER, MS, BAC, JPM, C, WB)

June 2, 2008 1:06 PM EDT
UPDATE: Standard & Poor's cut its ratings on Lehman Brothers Inc. (NYSE: LEH), Merrill Lynch & Co. Inc. (NYSE: MER), and Morgan Stanley (NYSE: MS). Standard & Poor's revised its outlooks on Bank of America Corp. (NYSE: BAC) and JPMorgan Chase & Co. (NYSE: JPM) to negative. In addition, Standard & Poor's affirmed its ratings on Citigroup Inc. (NYSE: C), removed the ratings from CreditWatch negative, and assigned a negative outlook. The firm also placed the ratings on Wachovia Corp. (NYSE: WB) on CreditWatch negative.

Standard & Poor's said the outlooks on the large financial institutions sector in the U.S. are now predominantly negative. S&P analyst Tanya Azarchs said, "The negative actions reflect prospects of continued weakness in the investment banking business and the potential for more write-offs, though not of the magnitude of those of the past few quarters. They also reflect a reassessment of the vulnerabilities of the wholesale and less diversified model of funding for the specialized investment banks."

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