Morgan Stanley reported a jump in quarterly profit as revenue from bond trading nearly doubled following interest rate hikes by the Federal Reserve. Roselle Chen reports.
Morgan Stanley reported a 74 percent jump in quarterly profit, topping analysts' estimates. Revenue from bond trading nearly doubled following interest rate hikes by the Federal Reserve. Good results sent the stock surging in early trading. Olivia Oran covers the story for Reuters: (SOUNDBITE) OLIVIA ORAN, REPORTER, REUTERS, (ENGLISH) SAYING: "The biggest takeaway from today's Morgan Stanley's earnings is fixed income trading. They're up huge off a really low base in the beginning of last year. But they've done a lot to transform the business since then. They cut 25 percent of head count. They've cut the amount of capital diverted to that business. And they've managed to exceed a billion dollar target that CEO James Gorman laid out for the past four quarters. So, I think, analysts and investors were encouraged by the results today." The bank hit another milestone laid out by Gorman - a ten percent-plus return on equity. Morgan Stanley's trading results echoed those across Wall Street - JPMorgan, Bank of America, and Citgroup - with one exception of chief rival Goldman Sachs, which was the only bank to report a drop in trading revenue.