Earnings reports reflect a new normal on Wall Street
Earnings for Goldman Sachs’s earnings declined 67 percent in 2010. Bank of America’s investment banking operation experienced a 53 percent decline in net income. Morgan Stanley’s earnings were down by 42 percent. How the mighty have fallen.
While Bank of America and Morgan Stanley saw an increase, the Wall Street Journal notes that “if the economy improves sharply this year, then banks could very well meet Wall Street’s earnings targets for them, justifying much bigger gains for the stock market. You just don’t see much sign of that happening yet.”
Analysts see a “new normal” emerging on Wall Street. “No matter how you cut it, the Goldman Sachs of tomorrow is not going to be the Goldman Sachs of 1999, when it did its I.P.O., or the Goldman Sachs of 2006, when it was at the high point of the cycle,” said Brad Hintz, a senior analyst with Sanford C. Bernstein & Company, tells the New York Times.