Charles Schwab, E-Trade Face Downgrades

Charles Schwab (NYSE:SCHW) takes a hit as JP Morgan cut the firm’s shares to Neutral from Buy, pointing at sales problems and noting that the firm’s earnings depend largely on interest rates, which are expected to remain low over the next two years.

Goldman Sachs reacts to E-Trade’s (NASDAQ:ETFC) surprise drop on Wednesday by downgrading the online broker to Neutral from Buy. Goldman Sachs said that although fourth-quarter results were lower than expected “owing to a few line items, our reduced expectations for 2012-2013 owe more to a more meaningful contraction in our net interest margin outlook than we had previously estimated.”

Here’s how these stocks are reacting to the downgrades:

Charles Schwab Corp. (NYSE:SCHW): SCHW shares recently traded at $11.63, down $0.51, or 4.2%. They have traded in a 52-week range of $10.56 to $19.69. Volume today was 16,912,744 shares versus a 3-month average volume of 12,925,100 shares. The company’s trailing P/E is 16.61, while trailing earnings are $0.70 per share.

E*TRADE Financial Corporation (NASDAQ:ETFC): ETFC shares recently traded at $7.91, down $1.45, or 15.49%. They have traded in a 52-week range of $7.42 to $18.13. Volume today was 25,955,837 shares versus a 3-month average volume of 7,035,180 shares. The company’s trailing P/E is 15.51, while trailing earnings are $0.51 per share.