Wall Street’s shareholders and leading investment banks have been on a down trend during the second quarter due to regulatory worries, slow economic growth and wary trading clients.

Analysts forecasted the second quarter to have downgrades especially for dealer firms and big brokers like Morgan Stanley and Goldman Sachs Group. This forecast is based on the shrinking of revenue from currencies, commodities and trading bonds by the first 3 months of 2011.

According to the Thomson Reuters, 15 out of 22 analysts have provided quarterly coverage for Goldman Sachs, slashing their income for each share as of June. Also, almost half of the analysts who provided coverage for Morgan Stanley have slashed EPS forecasts for the firm.

For this quarter, the EPS of Goldman Sachs is expected to have a standard amount of $2.89; this is considered to be lesser than the previous $4.38.

On the other hand, the average expected amount of EPS for the second quarter for Morgan Stanley has dropped to 52 cents; this is in comparison to the previous 3-month period amount of 50 cents and last year, down with 80 cents.

Mittleman Brothers’ chief investment officer Chris Mittleman expressed that he would not be shocked if the second quarter figures will be dropping. Further, he noted that he already stayed plain on the stocks of Goldman and Morgan because their income are much dependent and much volatile on the trading businesses’ ups and downs.