Moody’s fourth quarter earnings rose 66% as increased debt issuance boosted its core ratings business.
But that news quickly faded into to background as word circulated that the Justice Department and multiple states are discussing suing the agency for defrauding investors. The news started swirling last week after the US government filed a $5 billion civil suit against rival Standard & Poor’s, accusing the company of fraud related to mortgage bond ratings.
The idea of a potential suit sent the stock on a downward spiral that brought shares down over -21% for the week. At this point, it’s looking oversold, but I would hesitate to call that a buying opportunity, as last week’s decline pushed shares into an intermediate downward trend.