UPDATE 1-Fox-Pitt sees more losses at Lehman, GS, Morgan Stanley

(Recasts; adds details, share movement)

June 13 (Reuters) - Fox-Pitt Kelton forecast $9 billion in gross write-downs for "problem assets" of Goldman Sachs Group Inc (GS.N), Morgan Stanley (MS.N) and Lehman Brothers Holdings Inc LEH.N.

"Business conditions appear to be among the worst in several years, bulk asset sales have provided price transparency that should trigger more asset write-downs, and hedging was noticeably less effective," analyst David Trone said in a note to clients.

Sales of "problem assets" by companies like UBS AG (UBSN.VX), Citigroup Inc (C.N) and Lehman had helped to get the ball rolling on the painful, yet necessary, process of cleaning up the balance sheets of banks and brokers, Trone said.

Trone said though the group is over-sold and the next major inflection point is upward, a sustained rally is unlikely to commence soon, due to the economic malaise and new write-downs.

Trone, who rated Lehman as "outperform," slashed his third-quarter earnings estimates on the company to 36 cents a share from $1.29.

The brokerage, who has a "marketweight" rating on the U.S. investment banks and brokers, rated Goldman Sachs and Morgan Stanley as "in-line."

Lehman shares were up 8.33 percent at $24.59, Goldman shares were up 3.02 percent at $171.80 and Morgan Stanley shares were trading up 2.4 percent at $39.30 in morning trade on the New York Stock Exchange. (Reporting by Supantha Mukherjee in Bangalore; Editing by Amitha Rajan)