This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Morgan Stanley Takes Another Step Forward

NEW YORK (TheStreet) -- The Federal Reserve's bond-buying program isn't going away soon because the U.S. economy still stands on shaky legs. Will Ben Bernanke roll up his stimulus fire hose before he's absolutely sure the fire has been put out?

It didn't go unnoticed that no fewer than three central bankers over the past 24 hours have publicly calmed markets and clarified some misunderstandings. This came as Fed Bank presidents from Dallas and Minneapolis both moved to downplay the perception that quantitative easing is in imminent danger of ending.

At the same time, China's central bank said it will provide more liquidity and take needed steps to support local banks that are tight on cash or experiencing a credit squeeze. That helped the U.S. stock market to rebound on Tuesday.

One of the beneficiaries of that rebound was Morgan Stanley (MS), which recently announced that it will soon complete the purchase of brokerage firm Smith Barney. MS closed Tuesday at $25.03, up 2.6%.

Acquiring the part of Smith Barney it doesn't already own is a big deal, in fact the biggest since 1997 when MS bought Dean Witter Discover. The leadership of MS knows how to operate retail brokerage companies.

The current MS CEO is James Gorman, the same James Gorman who used to head Merrill Lynch's brokerage division. He and the board of directors want to transition MS into a company that enjoys the multiple streams of income that derive from wealth-management fees.

According to a June 21 press release, the company has received regulatory approval to buy the remaining 35 % interest in Morgan Stanley Smith Barney from Citigroup (C), fulfilling a key strategic priority.

The MS press release reads, "Upon the close of the purchase, Morgan Stanley will own 100% of the business, which operates under the name Morgan Stanley Wealth Management. Morgan Stanley will notify Citigroup that it intends to exercise its right to purchase the remaining interest at a previously established price of $4.7 billion, payable in cash. The closing is expected to take place on or about June 28, 2013."

It's been a very good year for MS stock. Last year CEO Gorman, in an effort to boost profitability, reduced the MS bond-trading side of the company and ramped up the wealth-management and brokerage side. As the chart below shows, it was well received by Wall Street.

MS ChartMS data by YCharts

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,915.07 -70.54 -0.42%
S&P 500 1,964.68 -8.15 -0.41%
NASDAQ 4,396.2040 -22.83 -0.52%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs