Economy-Finance

Washington Mutual shares waver, Goldman upgrades

NEW YORK—Shares of Washington Mutual Inc. wavered Friday morning as the thrift tried to reassure Wall Street that it has enough capital to survive the banking crisis, but credit ratings agencies Moody’s and Fitch said they are concerned the bank may not be able to raise additional funds.

Shares slipped to $2.43 shortly after the opening bell, then rose 15 cents to $2.98 in recent trading. The stock is down about 80 percent this year.

The Seattle-based bank made an appeal to the public late Thursday after its shares were hammered this week — falling nearly 46 percent before staging a turnaround at the end of the day Thursday. The bank pre-released some third-quarter financial metrics — nearly three weeks before the period even ends — and insisted it has adequate capital to fund its operations even as it announced another multibillion dollar write-down on bad mortgage loans.

The company, like many other financial firms, has suffered from investments in risky mortgage securities and other assets.

Goldman Sachs analyst Brian Foran upgraded the stock to “Neutral” from “Sell,” saying the company may have enough cash to avoid having to raise capital, possibly by selling shares. However, that would dilute the value of existing shares.

“Capital and reserves seem to be stable in the quarter, thus, even though losses continue to deliver body blows to the bank, the equity base is absorbing the pain and another capital raise might be avoidable,” Foran wrote in a note to investors.

Keefe, Bruyette & Woods analyst Frederick Cannon also said the news made him “feel modestly better” about the company because the results were slightly better than his expectations.

Standard & Poor’s Ratings Services on Friday confirmed the investment-grade ratings on WaMu, but fellow credit rating firms Moody’s and Fitch both downgraded their ratings on the bank late Thursday. The cited concerns over its ability to raise capital going forward and expectations for continued losses.