The walking wounded from the credit crisis seem to be hanging on for dear life. There's bond insurer Ambac Financial Group Inc., which says it has enough liquidity despite downgrades by all three rating agencies. Meanwhile, Fitch Ratings cut its ratings on IndyMac Bancorp following a regulator's determination that the thrift is not "well capitalized." The two are just a small sampling of the hurting financial sector, which cast a hazy shadow over the markets. There was no visibility in Tuesday midday trading as the Dow has wavered, trading up 21.57, or 0.23%, to 11,253.53 while the Nasdaq inched forward 7.28, or .32%, to 2,250.60.
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Ambac [ABK] shot up nearly 20%, making its biggest gain over the last several months, as it announced it has enough liquidity despite downgrades from rating agencies, Standard & Poor's, Moody's Investor Services and Fitch Ratings. The company said the downgrades cost Ambac an additional $506 million in increased collateral-posting requirements and investment agreement terminations of $270 million in June, according to MarketWatch.
Meanwhile, IndyMac [IMB] seems to be in a state of emergency as it shares fell 30 cents, or 42%, to 42 cents as the company cut its work force. IndyMac posted on its blog that the Office of Thrift Supervision announced late Monday that it was no longer well capitalized. The dour news was just another hit to the bank, which was downgraded by Fitch Ratings on Tuesday to CC from BB-. To top it off, IndyMac laid off 3,800 employees, leaving a staff of roughly 3,400. The company attributed the layoffs to depositors who are withdrawing their money at a higher rate than expected from the bank. - Gerald Magpily
| Troubled Wall Street |
| Name |
Open |
Last price |
Change |
Mkt cap |
| J.P. Morgan Chase & Co. |
34.3 |
34.03 |
-0.01 |
116608.27 |
| Lehman Brothers Inc. |
21.13 |
20.26 |
-0.58 |
11197.70 |
| Merrill Lynch & Co. |
30.5 |
30.52 |
0.16 |
30072.33 |
| Goldman Sachs Group Inc. |
171.37 |
168.47 |
-1.35 |
66411.45 |
| Morgan Stanley |
35.36 |
34.69 |
-0.38 |
38467.74 |
| Citigroup Inc. |
16.52 |
16.50 |
0.10 |
86622.25 |
| Fannie Mae |
16.4 |
15.40 |
-0.34 |
15021.27 |
| Freddie Mac |
12.69 |
11.89 |
-0.02 |
7689.52 |
| Bank of America Corp. |
21.56 |
22.11 |
0.58 |
98451.06 |
| Source: The Deal |
