Markets Open Down as Banks Are Rattled

On the first day following a robust March that included a four-week rally, the markets opened down this morning, and a negative research report on the big banks is being given at least partial blame.

In the first 15 minutes of trading, the Dow is down about 85 points, or a little more than 1 percent.

The broader S&P 500 is down about 1.4 percent and the tech-heavy Nasdaq is off about 1.7 percent.

Analyst Mike Mayo, who left Deutsche Bank AG to join Calyon Securities last month and is thought of as a tough analyst, issued a report on the big banks this morning warning that they are in worse shape than most believe, that loan losses will be far greater than estimated and that the U.S. economy is not pointing toward recovery but is in a "rolling depression."

Mayo assigned “sell” ratings to BB&T Corp., Fifth Third Bancorp, KeyCorp, SunTrust Banks Inc. and U.S. Bancorp, and put “underperform” ratings on Bank of America, Citigroup, Comerica, JPMorgan Chase & Co., PNC Financial Services Group Inc. and Wells Fargo & Co.

-- Frank Ahrens
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