Morgan Posts Q4 Report

Morgan Stanley reported a much wider-than-expected quarterly loss as the credit crisis generated more writedowns and slashed fees from investment banking and brokerage. Morgan posted a net loss of $2.3 billion, or $2.24 a share, during the fourth quarter. Including results from discontinued operations, the company said it lost $2.34 a share.

Morgan Stanley, which dropped 70 percent on the New York Stock Exchange this year, jumped 18 percent yesterday after Goldman Sachs's loss was smaller than some analysts estimated and the Federal Reserve said it would cut the main U.S. interest rate to as low as zero and buy debt to help combat the recession. The stock fell to $15.35 in New York from $16.13 yesterday.

From Bloomberg;

Morgan Stanley today reported fourth-quarter mortgage- related losses of $1.2 billion, which were more than offset by net revenue of $2.7 billion from the widening of Morgan Stanley's credit spreads. The firm had mark-to-market losses of $1.7 billion on leveraged loans and leveraged-loan commitments, and writedowns of $800 million on securities in the firm's subsidiary banks. Those losses were offset by gains of $1.1 billion related to debt hedges.

The company also booked $1.8 billion in investment losses during the quarter from real-estate funds and other principal investments.

Morgan Stanley said last month it was cutting 10 percent of the jobs in the institutional securities division and 9 percent of the positions in asset management to help offset lower revenue. The company also said it was hiring two Wachovia Corp. executives to build a new consumer banking division as part of an effort to attract deposits.