Fitch Ratings has downgraded the long-term debt ratings of Merrill Lynch & Co. Inc., amid a slew of rating changes for world’s major brokerage houses.

Merrill Lynch remains on Rating Outlook Negative. Fitch says its actions result from industry and company specific challenges faced by Merrill.

Both cyclical and secular trends are pressuring the securities industry it says. Secular trends include competitive pressures of universal banks, increased commoditization of trading products, and the lack of geographic diversification from European operations as market activity is more correlated to the United States than anticipated.

In addition, the industry may be hampered by prolonged negotiations and settlements related to regulatory investigations surrounding the initial public offering boom.

“Merrill Lynch has faced lagging profitability in all three of its business segments evidenced through pretax profit margins. While improvement is noted in the first quarter 2002 following 2001 restructuring charges, Fitch believes the cyclical and secular issues cited above as well as regulatory issues will create a more challenging environment in which to execute its strategy and meet its financial goals.”

Merrill Lynch responded to the news, saying that it continues to be a distinguished leader in key growth segments: global markets and investment banking, wealth management and investment management.

Fitch also revised the Rating Outlook for the long-term debt ratings of Goldman Sachs Group Inc.to Negative from Stable. It said that Goldman Sachs’ ratings are supported by its premier investment banking franchise, strong liquidity management and improved reported leverage since becoming a publicly traded company.

It downgraded the long-term debt of Morgan Stanley Dean Witter & Co., and its Rating Outlook was changed to Stable from Negative.

Fitch affirmed ratings for J.P. Morgan Chase & Co., but downgraded the long-term debt ratings of JPMorgan Chase Bank. It said, many of JPMC’s current challenges and risks arise from activities conducted at the bank.

Fitch also downgraded the long-term debt ratings of Charles Schwab, U.S. Trust Corp and U.S. Trust of New York.