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Morgan Stanley: Settlement Winner

NEW YORK (TheStreet) -- Morgan Stanley (MS) was the winner on Monday among the largest U.S. banks, with shares rising 4% to close at $22.21.

The broad indices all ended with 1% gains, as economic reports showed a continued housing recovery in the U.S. and personal income and spending data showed a slower growth pace in March from the previous month.

The National Association of Realtors on Monday said its Pending Sales Index rose 1.5% in March to a reading of 105.7, following a revised reading of 104.1 in February. The NAR said pending home sales were up 7% from a year earlier.

NAR Chief Economist Lawrence Yun said in a press release that "contract activity has been in a narrow range in recent months, not from a pause in demand but because of limited supply. Little movement is expected in near-term sales closings, but they should edge up modestly as the year progresses." The NAR projects total existing home sales in the U.S. to increase between 6.5% and 7% from 2012 to "nearly 5 million sales this year."


Also on Monday, the Bureau of Economic Analysis reported U.S. personal income during March increased by $30.9 billion, or 0.2% from February. Personal consumption expenditures (PCE) in March also increased by 0.2%, or $21.0 billion, after an increase of $86.6 million, or 0.7%, in February. The Bureau said that Real PCE -- PCE adjusted to remove price changes -- was up 0.3% in March, following an increase of the same amount in February.

The KBW Bank Index was up slightly to close at 56.78, with all but four of the 24 index components showing gains.

Shares of Moody's Investor Service (MCO) rose over 8% to close at $59.69, and Standard and Poor's parent McGraw-Hill (MHP) was up 3% to close at $53.45, after the two ratings agencies and Morgan Stanley late on Friday settled civil fraud lawsuits related to structured investment vehicles, or SIVs.

The suits were brought by Abu Dhabi Commercial Bank and King County, Wash.

Neither the ratings agencies nor Morgan Stanley would provide any details about the settlement, except that they denied wrongdoing. A Morgan Stanley spokesman said in an email that "we are pleased to have settled these cases," adding "the terms of the settlement have not been disclosed as they are confidential."

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