“The fallout of the subprime meltdown on financial services companies that hold some of the debt creates some risk to earnings. The financials make up over 25% of earnings for the S&P 500, so a series of disappointments in financials can have sizable effects on the overall tally.”
– Jeff Kleintop (free), Chief Market Strategist, LPL Financial
“I think we’re going to be seeing [credit rating] downgrades, and we’re just seeing the start of it. The problem in the subprime market is having a big impact.”
– Maryann Hurley (subscription required), Vice President, D.A. Davidson
Well, I wrote about a couple Sunday nights ago and now it’s starting to happen: S&P has put $12 billion in subprime mortgage backed securities on negative credit watch (subscription required) with the implications that they might be downgraded in the next few days.
As of right now (2:20pm EST):