Bear Stearns posted a 10% drop in quarterly earnings today, the latest victim of the subprime collapse. The country's second-largest mortgage-bond underwriter posted profits well below expectations, down nearly 33% from last year to $362 million. Goldman Sachs escaped bruised but more-or-less unscathed, with profits up 1% on the strength of its banking division.
Bear Stearns' fixed-income revenue, down 21%, makes up nearly half of the bank's income, Bloomberg reports. That's left them far more vulnerable than competitors such as Goldman, which covered a 24% drop in fixed-income earnings with gains in investment banking and equity trading. But even usually unflappable Goldman has been rattled: Shares are down 3% in mid-morning trading.