Morgan Stanley Profits Dip As Trades Slow

By Robert Davis
Oct 20 2010

Morgan Stanley, one of the largest investment firms in the US, announced this morning that they have seen a 67% decrease in profits.

The company has blamed this newest loss on slow trading numbers across the board as well as the still fragile economy in the US and abroad.

In the past year Morgan Stanley has discontinued several business ventures which may have led to the decline in profits as well. However, the company has said that slow trades over the summer period are also a major part of the profit decline.

Morgan Stanley and competitor Goldman Sachs make the bulk of their profit from commissions on stock, bond and financial trades in the market. With investors still being cautious with their investment dollars, companies like Morgan Stanley are on the losing end of the process.

Morgan Stanley announced this morning that they will work to restructure several areas where they do business. This includes their ownership in FrontPoint Partners LLC, a small trading firm that was purchased several years ago on the brink of collapse.

Goldman Sachs has reported similar earnings and profit dips this week. Both firms are still working to recover after the financial crisis in 2008 nearly shuttered the companies. Losses in the stock market and the near full collapse of the mortgage market put pressure on both companies from the very beginning.

Morgan Stanley shares were declining this morning and were recorded early at 3% below yesterday’s closing price.