Brokerage Stocks Getting Hit With NYSE

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If you looked at the brokerage firm stocks today, you’d have no idea the market was up.

Bd_chart_nov_29_2

Morgan Stanley (MS), Merrill Lynch (MER), Bear Stearns (BSC), and Goldman Sachs (GS) are all down.  They have made some inroads here for a small recovery, but this was very out of whack.  Bank of America (BAC) wasn’t part of the carnage, so it looks like some traders may be taking year-end profits very early after seeing a huge run.

If you look at the volume here with about 2 hours to the close there isn’t exactly a huge amount of selling.  You could say it is simply a buyers’ strike, but for it to be in most of the big names it just looks off.  Here is the volume in the names.

MS: Volume 2,985,100; Avg Vol (3m) 4,055,070
MER: Volume 3,374,900; Avg Vol (3m) 4,841,100
BSC: Volume 1,443,100; Avg Vol (3m) 1,555,460
GS: Volume 4,161,500; Avg Vol (3m) 4,969,790

The true guilty party here may be the exchange stocks.  Since J.P.Morgan downgraded the NYSE (NYX) rating from Outperform to Neutral, whose shares are down 5.6% at $95.50 today.  It isn’t from the economic numbers earlier because those would be affecting others too.  The tie in here is obviously tied to the exchange weakness.  NASDAQ (NDAQ) shares are down 2% at $39.06.  Oddly enough shares of market making Knight Capital (NITE) are up $0.03 at $17.44, but had been lower.  Specialists Van der Moolen (VDM) are up 0.4% at $5.32 and LaBranche (LAB) are down 2.6% at $10.70. 

The street is acting confused here.

Jon C. Ogg
November 29, 2006