Sector Snap Investment Banks

Shares of investment banks rose Friday afternoon despite a fall in the broader market as the government said personal incomes fell last month while consumer spending slowed.

Worries about troubles at major U.S. investment banks, which have been among the hardest hit companies over the past year amid the credit crisis, have often been a main culprit in the decline of the broader market.

Oppenheimer & Co. analyst Meredith Whitney on Friday maintained "Perform" ratings on Lehman, Morgan Stanley and Goldman Sachs Group Inc.

Shares of Lehman Brothers Holdings Inc. rose 33 cents, or 2.1 percent to $16.20 in late afternoon trading.

Morgan Stanley shares rose 52 cents to $41.12.

Shares of Goldman Sachs, which has been considered the most successful investment bank at handling the downturn in the credit markets, rose $2.29 to $164.12.

In a research note, Whitney said indices that gauge the performance of residential mortgage-backed securities were flat to higher compared with the previous week. Mortgage-backed securities have been among the worst-performing assets over the past year for investment banks.

As mortgages have increasingly defaulted, the price of bonds backed by the troubled loans has plummeted, forcing banks to cut their value. That has led to more than $300 billion in write-downs by financial services firms over the past year.

Steady to improving pricing for residential mortgage-backed securities could be helping investment banks shares entering the holiday weekend.

Merrill Lynch & Co. stock, which has been among the hardest hit over the past year by bad bets on the mortgage industry, rose 84 cents, or 3.1 percent, to $28.36. Whitney maintained an "Underperform" rating on the stock.

http://www.forbes.com/feeds/ap/2008/08/29/ap5372464.html

Business Financial Services

Sector Snap Investment Banks