Bear Stearns, Merrill Among Companies Affected by Sector-Wide Mortgage Hit

The subprime mortgage fallout continues to affect the entire investment community. Investment institutions like Merrill Lynch (MER@MER | Quote | Chart | News | PowerRating), Bear Stearns (BSC@BSC | Quote | Chart | News | PowerRating) and Goldman Sachs (GS@GS | Quote | Chart | News | PowerRating) are among the major companies that have been drastically affected by the troubles facing the lending and mortgage communities.

The Investment Brokerage industry, composed mostly of major banking institutions, has a PowerRatings (for Industries) ranking of 2. Industries with a PowerRating of 2 have an annualized return of 5.97% based on 3-month historical returns. By contrast, industries with a PowerRating of 10 have an annualized return of 35.27% based on 3-month historical returns.

Most recently, Bear Stearns experienced massive losses, stemming from wrong-sided bets in the subprime mortgage sector. Two multi-billion dollar hedge funds managed by Bear Stearns fell as much as 20% at the end of June, prompting on the the primary lenders, Merrill Lynch, to consider seizing assets in order to stem losses.

Interestingly, despite major sector weakness, individual stocks within this industry have retained relatively positive PowerRatings (for Investors).

Here are some individual PowerRatings (for Investors) of stocks within the Investment Brokerage industry: