DBRS has confirmed the ratings on the four big Wall St. brokerage firms that reported earnings last week: Goldman Sachs Group, Morgan Stanley, Lehman Brothers and Bear Stearns.

It warns, however, that the effects of the market disruption are ongoing.

The rating agency says it recognizes that credit markets remain disrupted and the U.S. economy continues to show weakness that could pose more extensive challenges for broker dealers generally, should weakness spread to the equity markets.

The confirmation of Goldman’s rating reflects the company’s demonstration in the quarter of the strength of its franchise and its ability to generate strong earnings, DBRS said, despite the adverse consequences of a very challenging environment.

It notes that Goldman benefited from the diversity of its franchise, with international operations, investment banking, equities, securities services and principal investments all performing strongly.

In DBRS’s view, despite a very challenging market environment during the quarter, Morgan Stanley demonstrated the strength of its diverse franchise, its resilient earnings power and sound liquidity and capital that underpins its ratings.

As for Lehman Brothers, DBRS says that the firm demonstrated the strength of its diverse franchise and its resilient earnings power, which supports its ratings. It recognizes the progress Lehman continues to make in developing its franchise and building more resilient earnings power.

The rating agency reports that Bear Stearns’s operating performance was affected by the market environment, particularly in mortgages, credit products and leveraged lending that resulted in both lower business volumes and asset markdowns. DBRS says that Bear Stearns demonstrated disciplined expense management.

“In contrast to the downturn in earnings in 2001 to 2002, the recent market turmoil has been particularly challenging for Bear Stearns, given the company’s greater concentration of its businesses in mortgage and credit products,” it says. “Nevertheless, Bear Stearns benefited from the diversity of its franchise.”

DBRS said the company is capable of riding out continued market disruptions. It adds that it is concerned that activity levels in mortgage and credit markets, two of Bear Stearns’s strengths, may remain subdued for some time.

Moreover, DBRS perceives that it is important for Bear Stearns to succeed in repositioning its asset management segment, whose expansion has been disrupted by problems in two hedge funds.