Moody's Investor Service cut the credit rating of the 6 largest US banks with international arms. In anticipation of this, and on general economic jitters, stocks tanked 251 points in the second worst day of trading this year. The downgrade of US banks reflects growing concern about the global economy and the exposore of US companies to the european debt crisis. Wall Street Journal: The Moody's Corp. unit reduced Morgan Stanley's rating to Baa1, which is three notches above the junk, or noninvestment grade, status that many bond buyers avoid. The move stands to add to the company's borrowing costs and force it to present billions of dollars in cash or high-grade bonds as collateral. More important, the downgrade could trim Morgan Stanley's earnings power by cutting market share in high-margin businesses such as derivatives as traders seek out higher-rated trading partners. Questions about major banks' earnings power and capacity to withstand market shocks have weighed on...(Read Full Post)