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Morgan Stanley back in profit but outlook weak

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Morgan Stanley back in profit but outlook weak

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Morgan Stanley swung to a profit in the second quarter but its shares fell in value.

That was because investors were disappointed that revenue declined by 24 percent.

The reason for that was a slowdown in trading and dealmaking – more than others on Wall Street.

Preparing for weak economic growth globally and low trading volume the bank said it plans to cut more staff this year and expects headcount to fall by seven percent, or 4,100.

Morgan Stanley, which is the last of the major US financial companies to report, posted earnings the equivalent of 460 million euros.

The investment bank said its bond-trading business had been hurt by its credit rating being cut.

Moody’s Investors Service downgraded the bank less than many investors had feared, and Morgan Stanley’s bond trading business has picked up in the third quarter, but economic headwinds still make the financial services sector difficult, Chief Financial Officer Ruth Porat said.