Standard & Poor’s said business conditions for securities firms are worse than in the second half of 1998 and revenue from investment banking and trading could fall 47% in the final six months of this year.

The rating company said it conducted a “stress test” designed to measure the “ability of investment banking businesses to withstand such scenarios.” The conclusions don’t constitute a forecast, S&P said in a statement.

“This is more severe than in 1998,” when investment- banking and trading revenue fell 31% in the second half following Russia’s debt default, S&P analyst Nick Hill said in the statement. At the time, revenue from fixed-income, currencies and commodities was negligible or even negative, he said. As in 1998, firms are likely to cut bonuses to stay profitable, said Mr. Hill, who is based in London.

In a separate report, Moody’s Investors Service estimated revenue losses of 10% or less due to loan markdowns for the five largest American investment banks in the second half of 2007. The Moody’s team, led by senior vice presidents Peter Nerby and Blaine Frantz in Jersey City, said its stress tests predict “positive, albeit depressed, earnings and a respectable level of profitability” possibly boosted by higher equities and derivatives trading volume in volatile markets.

S&P looked at seven American and four European banks. Banks most at risk include Bear Stearns Cos., Deutsche Bank AG, and others more dependent on fixed income, S&P said. The “least affected should be Citigroup Inc. and Morgan Stanley,” which are more diversified.

Markets recovered quickly after the 1998 drop and favorable economic fundamentals now may cushion the declines in investment banking and trading, the report said. This time, “the source of the problem has shifted from emerging markets to the world’s most developed economy.”