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By Jason Stipp | 01-20-2012 12:00 PM

Struggle or Soar?

Morningstar markets editor Jeremy Glaser reads the fortunes for investment and traditional banks, eBay, Apple's digital textbook push, and more.

Jason Stipp: I'm Jason Stipp for Morningstar and welcome to the Friday Five.

We saw divergent fortunes in the market this week. Who will struggle and who will soar? Morningstar's markets editor Jeremy Glaser is here to offer the details.

Thanks for joining me, Jeremy.

Jeremy Glaser: You're quite welcome, Jason.

Stipp: So, what do you have for the Friday Five this week?

Glaser: We're going to take a look at investment banks, eBay, the Republican presidential nomination, Apple, and finally, AT&T.

Stipp: So, we started to get some financial earnings results for the fourth quarter, and we did see that investment banking was a bit of headwind. What's going on there? What's the story?

Glaser: Investment banking has been a black spot on a lot of the earnings across a lot of the major financial institutions. Citigroup, Goldman Sachs, Morgan Stanley really all saw their investment banking results weren't really quite up to snuff, or weren't really quite as good as they have been before.

I think a lot of this is just that, A, investment banking is a very cyclical and volatile business. Especially when you're doing so much proprietary trading, which a lot of the banks do now, if trades go away from you for a quarter, you can all of a sudden see those losses really begin to pile up.

A lot of the traditional things that the banks do--M&A advisory, IPOs, other ways that they are creating income and they're creating that fee stream--have really been under pressure with all the volatility. A lot of corporations really are backing away from some of those actions and haven't really needed those services as much.

So, I don't think it's that investment banking as a whole is in a terminal decline or anything like that, but certainly it's been striking how across the entire industry it's been a troubled quarter, and how some of the traditional banking houses like Wells Fargo that don't have as much of an exposure to investment banking really have been able to perform much better than their larger rivals.

Stipp: On the flipside, in the online space, we saw eBay report some good results that investors really liked. What was the story there? Why did they do so well?

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