Moody’s Throws Kerosene on European Debt Crisis

Moody’s (NYSE:MCO) said it may downgrade 17 global and 114 European financial institutions after reviewing long-term ratings and credit assessments. “Capital markets firms are confronting evolving challenges, such as more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions,” the ratings agency said in a statement.

UBS (NYSE:UBS), Credit Suisse (NYSE:CS), and Morgan Stanley (NYSE:MS) could potentially be cut three notches, while Barclays (NYSE:BCS), BNP Paribas, Credit Agricole, Deutsche Bank (NYSE:DB), HSBC Holdings (NYSE:HBC) and Goldman Sachs (NYSE:GS) may be lowered by two. Bank of America (NYSE:BAC) and Nomura could be looking at one-notch downgrades.

Ratings Cuts to Sovereigns

Moody’s cut the ratings of Italy (NYSE:EWI), Spain (NYSE:EWP), and Portugal and is threatening France (NYSEARCA:EWQ), Britain (NYSE:EWU) and Austria. Standard & Poor’s also cut France and Austria’s ratings. Concerns that Greece’s bailout may be delayed have also weakened Asian shares. Europe is trapped in a brutal cycle by European banks’ sovereign debt holdings in Greece, Portugal, Ireland, Spain, and Italy. The dropping value of the debt puts pressure on banks, which in turn affects lending and thus spending, making it harder to maintain growth.

European Union leaders tried to build a financial barrier around the affected nations, but market concerns soared again Wednesday when the EU said it was considering delaying a second bailout plan for Greece.

Here’s how the banks are reacting to the threat:

UBS AG (NYSE:UBS): UBS shares recently traded at $14.07, up $0.15, or 1.08%. They have traded in a 52-week range of $10.41 to $20.08. Volume today was 1,079,876 shares versus a 3-month average volume of 4,499,280 shares. The company’s trailing P/E is 9.05, while trailing earnings are $1.55 per share.

Bank of America Corporation (NYSE:BAC): BAC shares recently traded at $7.83, up $0.05, or 0.64%. They have traded in a 52-week range of $4.92 to $14.91. Volume today was 98,158,334 shares versus a 3-month average volume of 283,004,000 shares. The company’s trailing P/E is 779.99, while trailing earnings are $0.01 per share.

Morgan Stanley (NYSE:MS): MS shares recently traded at $18.63, down $0.33, or 1.74%. They have traded in a 52-week range of $11.58 to $31.04. Volume today was 11,989,479 shares versus a 3-month average volume of 29,384,300 shares. The company’s trailing P/E is 15.07, while trailing earnings are $1.23 per share.

Credit Suisse Group (NYSE:CS): CS shares recently traded at $25.71, up $0.16, or 0.63%. They have traded in a 52-week range of $21.18 to $47.63. Volume today was 363,006 shares versus a 3-month average volume of 2,407,490 shares. The company’s trailing P/E is 17.32, while trailing earnings are $1.48 per share.

The Goldman Sachs Group, Inc. (NYSE:GS): GS shares recently traded at $112.69, down $0.48, or 0.42%. They have traded in a 52-week range of $84.27 to $168.69. Volume today was 1,603,543 shares versus a 3-month average volume of 7,390,290 shares. The company’s trailing P/E is 24.89, while trailing earnings are $4.51 per share.

Deutsche Bank AG (NYSE:DB): DB shares recently traded at $,. They have traded in a 52-week range of $ to $. Volume today was shares versus a 3-month average volume of shares. The company’s trailing P/E is , while trailing earnings are $ per share.

HSBC Holdings plc (NYSE:HBC): HBC shares recently traded at $45.10, up $0.2, or 0.45%. They have traded in a 52-week range of $35.72 to $59.14. Volume today was 470,637 shares versus a 3-month average volume of 2,308,060 shares. The company’s trailing P/E is 9.42, while trailing earnings are $4.79 per share.

To contact the reporter on this story: Laurie Danas at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com