Financial Stocks Sink as Fears of Exposure to Eurobanks Weighing; Morgan Stanley Leading Sector Lower (XLF)
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The Financial Select Sector SPDR ETF (NYSE: XLF) has pushed to session lows as fears related to exposure to Eurozone banks (specifically France) are beginning to seriously weigh on traders. The fund is currently down 3.5 percent.
Around the US Financial sector, Morgan Stanley (NYSE: MS) is leading the group lower, down 8.2 percent to $12.68. Citi (NYSE: C) shares are down 6.9 percent, Goldman (NYSE: GS) shares are down 5.6 percent, BofA (NYSE: BAC) shares are down 5 percent, shares of JPMorgan (NYSE: JPM) are down 4.4 percent and Wells Fargo's (NYSE: WFC) stock is down 3.2 percent.
Traders may be attacking Morgan Stanley this afternoon following speculation at ZeroHedge in which the blog considers the bank's very sharp increase in exposure to French banks from 2009 to 2010. Earlier in the day, PIMCO's CEO Mohamed El-Erian quipped about the potential for French banks to start a wildfire across Europe stemming from their exposure to Greece. He suggested several ways in which the ECB and banks could work together to stave off any further drops, saying that issues like capital cushions and assets quality have gone unaddressed.
At the end of 2009, Morgan Stanley had about $9.7 billion in cash, receivables, securities purchased under agreements to resell, securities borrowed and cash trading instruments but exclude derivative instruments and commitments at French banks; at the end of last year, Morgan Stanley had about $39 billion in exposure to the same pool of assets.
Markets are feeling the pressure from banks today: the Dow Jones is off 466 to 10,658, the Nasdaq is down 106 to 2432.34, and the S&P is 47 lower to 1120.
Around the US Financial sector, Morgan Stanley (NYSE: MS) is leading the group lower, down 8.2 percent to $12.68. Citi (NYSE: C) shares are down 6.9 percent, Goldman (NYSE: GS) shares are down 5.6 percent, BofA (NYSE: BAC) shares are down 5 percent, shares of JPMorgan (NYSE: JPM) are down 4.4 percent and Wells Fargo's (NYSE: WFC) stock is down 3.2 percent.
Traders may be attacking Morgan Stanley this afternoon following speculation at ZeroHedge in which the blog considers the bank's very sharp increase in exposure to French banks from 2009 to 2010. Earlier in the day, PIMCO's CEO Mohamed El-Erian quipped about the potential for French banks to start a wildfire across Europe stemming from their exposure to Greece. He suggested several ways in which the ECB and banks could work together to stave off any further drops, saying that issues like capital cushions and assets quality have gone unaddressed.
At the end of 2009, Morgan Stanley had about $9.7 billion in cash, receivables, securities purchased under agreements to resell, securities borrowed and cash trading instruments but exclude derivative instruments and commitments at French banks; at the end of last year, Morgan Stanley had about $39 billion in exposure to the same pool of assets.
Markets are feeling the pressure from banks today: the Dow Jones is off 466 to 10,658, the Nasdaq is down 106 to 2432.34, and the S&P is 47 lower to 1120.
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