NYSE-Reporting Firms: Housing and Mortgage Crisis Caught Up with Profits in 3Q’07

Pre-tax profits of NYSE-reporting firms fell from a gain of $4.2 billion in 2Q’07 to a loss of $3.8 billion in 3Q’07, bringing year-to-date profits to a total of $5.1 billion, nearly 60 percent below that in the same year-earlier period. Lower profits were driven by trading losses and weak underwriting revenues. Net revenues (total revenues minus interest expense) totaled $20.1 billion in the third quarter, 42.1 percent and 33.6 percent below levels in 2Q’07 and 3Q’06, respectively.

Middle Market Report 3Q’07

Middle-market firm-led issuance increased through the first three quarters of 2007, the result of strong growth in the agency, municipal, and securitization sectors earlier in the year. Tighter financing conditions in the corporate markets slowed issuance, while equity underwriting and mergers and acquisitions volume moved higher.

Securities Industry Employment Update 4Q’07

The Bureau of Labor Statistics estimates that national securities industry employment decreased by 1,000 jobs in September, down 0.1 percent from August’s level. During the same period, securities industry employment in New York State decreased by 0.6 percent, or 1,200 jobs, and in New York City was down 1.5 percent, or 3,000 jobs.

Credits

Research

• Marcelo Vieira
• Bryan Gross
• Paul Rainy