Northern Trust, Bank of NY Mellon shares fall

Northern Trust shares fell $3.56, or 4.6 percent, to $73 in midday trading. Shares have traded between $47.89 and $88.92 in the past 12 months.

Bank of New York Mellon, meanwhile, dropped $1.81, or 5.1 percent, to $33.89. Shares have traded between $21.33 and $50.26 in the past 12 months.

In a note to clients, analyst Mark Fitzgibbon noted that each bank has a significant portion of their assets under management in money market products. While the U.S. Treasury Department said last week that it would insure the holdings of eligible money market funds for one year, it is unclear who is "eligible," how much will be insured and how much it will cost to get this insurance, Fitzgibbon said.

Two prominent money market funds closed last week after institutional clients pulled their cash on fears over the funds' possible exposure to battered financial firms like Lehman Brothers Holdings Inc., which filed for bankruptcy protection last Monday.

Fitzgibbon said these companies may need to record charges to prop up these funds in coming quarters.

Additionally, the trust banks may choose to inject capital to help prop up other asset pools they manage that may have been impacted by Fannie Mae, Freddie Mac, Lehman Brothers and American International Group Inc.

Fitzgibbon also believes Northern Trust and Bank of New York Mellon could experience some fallout from counterparty exposure to Lehman Brothers and other troubled firms.

Fitzgibbon cut his 12-month target price on Bank of New York Mellon by $2 to $33, and the target price on Northern Trust by $3 to $73.