Schwab has formed a consortium with fixed-income Web site ValuBond in a partnership that will enable San Francisco-based Schwab to enter into the municipal bond market and expand its corporate and convertible bond offerings, Schwab said.
Under the terms of the deal, Schwab's site will link to ValuBond to allow customers to trade bonds sometime in the third quarter. Schwab will charge $25 per order. Customers of the largest online broker will have access to ValuBond's information and trading tools. ValuBond agreed to give Schwab a seat on its board of directors.
The announcement did nothing to boost Schwab's stock. It fell $1.81 today, closing at $30.50.
A down market, greater competition and the fall in sales commissions have prodded Schwab and rival E*Trade to expand their financial services.
This week Schwab announced the launch of wireless trading and last week, Menlo Park, Calif.,-based E*Trade joined with consulting firm Ernst & Young to form its own consulting venture using E*Trade's banking and trading services.