Morgan Stanley and Goldman Sachs dropped the most in the last 12 months as Europe’s debt crisis reignited and investors speculated that President Barack Obama’s re-election means tighter curbs on banks.
Bloomberg reports that the two securities firms led U.S. financial stocks lower after Obama defeated Mitt Romney and European Central Bank President Mario Draghi said the region’s crisis is hurting Germany, its biggest economy.
Goldman Sachs fell 6.6% percent to close $117.98 in New York Wednesday, and Morgan Stanley tumbled 8.6% to $16.63. Bank of America Corp. (BAC) dropped 7.1%.
'Bankers were hoping Romney would win and give them more sympathetic regulators or that Republicans would take the Senate and they could rewrite Dodd-Frank', said Edward Mills, a bank policy analyst at FBR Capital Markets and former aide on the House Financial Services Committee. 'The floodgate is going to open for the final rules under Dodd-Frank', he said, referring to the 2010 law designed to overhaul banking rules.
JPMorgan Chase & Co. (JPM) fell 5.6%. That was the most in six months, since the day after disclosing a trading loss in a London unit.
Hit the link below to access the complete Bloomberg article: