Bank of America, Wells Fargo, and Citi Get Drop Kicked by Moody’s
The Dow (NYSE:DIA) is in a tug of war between Hewlett-Packard (NYSE:HPQ) and Bank of America (NYSE:BAC). Shares of Hewlett Packard are screaming higher as a CEO change may be in order, while BofA is sinking more than 4% due to a downgrade from Moody’s (NYSE:MCO). Wells Fargo is also lower on the day as it was downgraded by Moody’s as well.
Super Hot Feature: These Wall Street Firms are About to Start Firing People Like Crazy!
On June 2nd, Moody’s placed financial giants Bank of America, Wells Fargo (NYSE:WFC), and Citigroup (NYSE:C) on watch for a possible downgrade. Now, Moody’s is officially downgrading all three financial giants. BofA’s senior debt was downgraded from A2 to BAA1, citing that the US government will be less likely to bail out the bank going forward. Their short-term debt was downgraded from Prime-1 to Prime-2, long-term deposit ratings from Aa3 to A2, and short-term BANA rating was affirmed at Prime-1. Citigroup had its short-term rating downgraded, but its long-term rating confirmed by Moody’s.
Bank of America has been the topic of discussion lately, and not for the right reasons. It has been a mess at the largest US lender since the sub-prime debacle. John Paulson, the billionaire who bought a $2.7 billion stake in BofA during the second quarter of 2009, told clients in June that he reduced his stake. Furthermore, the bank sold half of its China Construction Bank stake to raise $8.3 billion, accepted a $5 billion deal with Warren Buffett, and even announced job cuts last week to the tune of 30,000.