Goldman Sachs Weighs On Financial Stocks
Goldman Sachs Group Inc.(NYSE:GS) has long been know as the smartest firm on the street. However, its golden image has been tarnished since the credit crisis in 2008. In July 2010, the company paid a record $550 million fine by the Security and Exchange(SEC) to settle charges that Goldman misled investors in a subprime mortgage product just as the U.S. housing market was starting to collapse. This was the largest penalty ever paid by a Wall Street firm.
Today, the stock is declining lower by $4.39 to $155.78 a share after the Senate Permanent Subcommittee on Investigations released a report on the financial crisis. The report highlighted activities that Goldman Sachs may have done wrong in 2007 just before the 2008 stock market crash. Senator Carl Levin(D-Mich) openly said that the company may face additional scrutiny from the Department of Justice(DOJ), or the Security and Exchange Commission.
This report is bringing down the entire financial sector today. Many traders and investors are now saying if one company was involved in shady practices there is a good chance that all of the other leading firms may have done the same.
Morgan Stanley(NYSE:MS) is trading lower on the session by just 0.1 cent to $26.77 a share. Morgan Stanley stock has been beaten down on the daily chart and is trading below all of the major moving averages. This puts the stock in a weak position on the charts. Morgan Stanley is scheduled to report earnings on April 21, 2011. The stock will have daily chart support around the $25.00 and $24.00 levels.
Goldman Sachs Group Inc. will have daily chart support around the $152.50 level and more around the $147.00 area. However, when negative news is reported such as this about Goldman Sachs, it could drag the stock lower. Traders and investors must use caution when trading this stock at this time.