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Bank stocks plummeted after Fitch Ratings released a statement about U.S. bank exposure to Europe.Goldman sachs fell fell $4.21, or 4.16%, to close at $95.60 a share.
JPMorgan dropped 3.76%.
Bank of America fell 3.75%.
Morgan Stanley tumbled $1.27, or 7.97%.
Here’s the key part of the report:
U.S. banks have manageable direct exposures to the stressed European markets (Greece, Ireland, Italy, Portugal and Spain), but further contagion poses a serious risk, according to a Fitch Ratings report.
Fitch believes that unless the Eurozone debt crisis is resolved in a timely and orderly manner, the broad credit outlook for the U.S. banking industry could worsen. Fitch’s current outlook for the industry is stable, reflecting improved fundamentals at most banks combined with ratings lower than at pre-crisis levels. However, risks of a negative shock are rising and could alter this outlook.
U.S. banks have reduced direct exposure to stressed European markets considerably over the past year in Fitch’s view. Direct exposures appear manageable in the context of banks’ capital positions and diverse earnings streams. Public disclosure of direct exposures has generally improved recently but varies from bank to bank.