Morgan Stanley Still Needs to Prove Itself

"The debate on Discover is what will Discover be worth to an acquirer?" Hintz says. "Discover has historically been a slow-growth credit card franchise with relatively weak client demographics."

Investors expect Morgan Stanley to take a small hit on the fixed income side of its business, as the mortgage market drama continues to play out.

Morgan appears less vulnerable to emerging weakness in the mortgage market than peers Bear Stearns(BSC Quote), Lehman Bros.(LEH Quote) or Goldman Sachs(GS Quote). All three said second-quarter earnings were hit to some degree last week by bond market weakness, though Lehman and Goldman both posted strong quarters overall.

Hintz says Wall Street will be keeping an eye on whether Morgan Stanley might be hit by similar losses on so-called subprime mortgages.

"They're going to have to reassure the marketplace that their exposure to hedge funds that would have been involved in that sector is controlled," Hintz said.