Morgan Stanley Goldman Going Up

 Morgan Stanley shares jumped 8.6% to $27.36 in morning trading Wednesday, while Goldman shares rose 43 cents to $149.34. Today’s results from Morgan Stanley, based in New York, and Wells Fargo, based in San Francisco, were at odds with banks that reported in the past week. "This is a very impressive quarter for Morgan Stanley on the trading side," Doug Sipkin, an analyst at Ticonderoga Securities, wrote in a note to investors Wednesday. "Considering peer results, this was not a bad quarter for Morgan Stanley, in our view. Trading held up in a tough environment."


As Mr. Gorman took over as chief executive, he said that he wants to build a steadier, more diversified bank - with less mega trading and more advisory work for clients. Its new profitability comes from a revitalized trading desk. They have hired up to 400 employees for their sales and trading staff worldwide, They made this program that was meant to have reached full speed by the first quarter of 2010. Morgan Stanley paid off for that quarter: the institutional securities unit swung to a $2.1 billion gain in pretax income from continuing operations, from a $464 million loss last year. Fixed-income trading revenue more than doubled to $2.7 billion.

"Trading is a cyclical business that equity investors rightfully place a discount on due to its inherent volatility and uncertainty. But over time, Goldman Sachs has proven itself to be the most successful of the major capital markets firms by consistently generating the highest revenue return on net assets and generating the highest revenue yield on risk," Hintz added.



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