Schwab Cuts Trading Prices Again

Charles Schwab Corp. the biggest discount brokerage, said Monday that it would cut trading commissions for the second time since May in a bid to outmaneuver rivals amid fierce competition.

The struggling company, which in July ousted its chief executive and brought founder Charles R. Schwab back to run the business, said its basic commission for online stock trades of as many as 1,000 shares would fall 33%, from $29.95 to $19.95, effective Nov. 1.

The San Francisco-based brokerage also said it would lower commissions on an array of other services. Even so, its prices would remain higher than those of some of its rivals.

“It’s a continuation of the price erosion in the industry,” said David Trone, an analyst with Fox-Pitt Kelton Inc.

Smaller, more nimble brokerages such as E-Trade Financial Corp. and Ameritrade Holding Corp. have been undercutting Schwab in recent years by building less expensive trading channels on the Internet.

As the weak stock market this year has caused many individual investors to pull back from trading, brokerages have been competing for a smaller pie.

Schwab, which has jettisoned more than one-third of its workforce since 2000, said its latest commission cuts might shave about 2% from its revenue in the next year. The estimate would translate into a $90-million decline, based on Schwab’s recent revenue trends.

Schwab’s shares fell 15 cents Monday to $9.07 on the New York Stock Exchange. The stock has fallen 23% year to date.