Morgan Stanley Loss; U.S. Stocks Rise

123jump.com Staff
22 Apr, 2009
New York City

U.S. stocks edged higher after a flood of earnings news met most investors expectations of lower earnings. Memory chips makers gained in the morning trading on probable price increase from the recent lows. Morgan Stanley declined after it reported wider than expected losses.

[R]11:20 AM New York – U.S. stocks edged higher after a flood of earnings news met most investors expectations of lower earnings. Memory chips makers gained in the morning trading on probable price increase from the recent lows.[/R]

U.S. stocks in early morning trading edged higher on better than expected earnings at AT&T and weaker than expected earnings from Morgan Stanley. Chips and memory related stocks gained after Elpida chairman suggested price increase in few months.

Of the stocks in S&P 500 index, 255 increased, 241 declined and 4 were unchanged. Banks, insurance and real estate companies led the decliners.

KeyCorp led decliners in the index with a loss of 12% followed by losses in Morgan Stanley of 6.6%, in Equity Residential Properties of 5.7% and in Molex Inc of 5.3%.

International Paper Company led gainers in the S&P 500 index with a rise of 14% followed by gains in Ford Motor Company of 13%, in SanDisk Corp of 10.4%, in Micron Technology of 9.3%.

Earnings Review

Morgan Stanley ((MS)) reported first quarter net loss of $177 million or 57 cents a share compared with net income of $1.4 billion. Revenues in the period declined 62% to $3 billion.

Morgan Stanley blamed the current weakness in sales on $1billion loss from investment in real estate and also $1.5 billion in loan interest rate margins.

The wider than expected loss in the quarter comes after the loss of $1.3 billion in the December quarter. The securities companies was recently converted to a government monitored bank and sought in billions in loans from the U.S. Treasury.

The bank also trimmed its quarterly dividend to 5 cents from 27 cents and said the cut will save $1 billion a year.

Morgan Stanley ((MS)) sold 21% stake in September 2008 to Mitsubishi UFJ Group for $9 billion and later entered into a joint venture with the Japanese bank and integrated its securities operation in that country.

AT&T ((T)) reported first quarter revenues of $30.6 billion compared to $30.7 billion a year ago quarter and net income declined to $3.1 billion from $3.5 billion a year ago. Earnings per share declined to 53 cents from 57 cents.

In the first quarter the company booked 5 cents a share or $400 million of incremental noncash and retirement expenses.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 15.97 or 0.18% to 8,727.30, Hang Seng index in Hong Kong decreased 407.44 or 2.67% closed to 14,878.45, CSI 300 index in China lower 99.16 or 3.71% closed to 2,576.28. ASX 200 index in Australia decreased 9.20 or 0.25% closed to 3,668.20. The KL Composite index in Malaysia higher 1.98 or 0.20% closed to 968.58.

The Kospi Index in South Korea increased 19.21 or 1.44% to close at 1,356.02. SET index in Thailand closed lower 5.76 or 1.24% to 460.62 and JSE Index in Indonesia decreased 13.62 or 0.84% closed to 1,615.23. The Sensex index in India decreased 80.57 or 0.74% closed to 10,817.54.

Europe Markets Review

In London FTSE 100 Index traded higher 18.16 or 0.46% to 4,005.62, in Paris CAC 40 Index increased 15.66 or 0.53% to 2,989.60 and in Frankfurt DAX index traded higher 28.04 or 0.62% to 4,529.67. In Zurich trading SMI decreased 16.68 or 0.33% to 5,060.04.