Standard & Poor's Corp. has revised its outlook on J.P. Morgan & Co. to "negative," from "stable," citing trading risk.

The action, announced late Tuesday, could be the first step toward downgrading the only remaining AAA-rated banking institution in the country, if the company's earnings remain volatile for several years.

The action was taken in response to a 24% decline from 1993 in the bank company's first-quarter earnings.

S&P reaffirmed its ratings on the debt of J.P. Morgan and its subsidiaries. The change in outlook affects only the holding company. S&P cited Morgan's "unique franchise among large government and corporate clients" in refraining from more severe action.

A spokesman said Morgan was pleased its ratings had been reaffirmed. He objected to the rating agency's having revised the outlook based on one difficult quarter.

S&P recently downgraded debt of Bankers Trust New York Corp., citing similar woes.

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