Listed money managers were among the hardest-hit stocks today as JPMorgan Chases weekend purchase of Bear Stearns Cos. for just $2 a share squashed the hopes of some market participants for a sustained market rebound anytime soon.
Money manager shares finished off of their lows, but many remains sharply down for the day.
Legg Masons stock dropped as much as 12% in trading today before ending the day off just under 10%, hurt by some of its boutiques holdings of Bear Stearns stock. Invesco and Affiliated Managers Group each tumbled as much as 10% before recovering in late trading to down 6.2% and 4.8%, respectively. In late trading, Eaton Vance, meanwhile, was down roughly 2.5%. Private equity firm Blackstone and hedge fund Fortress Investment Group, which suffered intraday plunges of 15% to 16% were down 7% and 11% in late trading.
In a report today by UBS Securities, analysts Glenn Schorr and Mike Carrier downgraded their remaining buys among capital-market stocks to neutral. The report said capital markets related stocks are likely to test 20-year lows before a sustained rebound can take place.