First Marblehead shares continue to slide

Shares of First Marblehead Corp. continued to slide as an analyst removed his "Sell" rating on the stock, but said the student-loan services provider faces a tough economic environment in which to restructure its flagging business and conserve cash.

Sandler O'Neill & Partners analyst Michael Taiano upgraded Boston-based First Marblehead's stock to "Hold," given that shares are trading in range of his $3.25 price target - an amount he said "approximates the amount of cash held on its balance sheet."

First Marblehead shares fell 15 cents, or 4.8 percent, to $2.96. The stock traded above $40 last fall, but has since lost most of its value as turmoil in credit markets has spread from mortgage lending to other areas such as the student loan market, which has seen rising defaults among student borrowers.

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