Morgan Stanley Closes Higher After Statement on High-Yield Business - TheStreet

After seeing its stock pummeled based on market rumors of big losses in its high-yield securities business,

Morgan Stanley Dean Witter

( MWD) tried to calm investors with a statement outlining the impact that junk-bond writedowns are having on earnings.

Morgan Stanley shares fell about 19% between Oct. 5 and Oct. 10 and continued to slip Wednesday until the firm issued the statement. Shares of the company closed up $3.25, or 4%, at 77.75.

In a statement released Wednesday afternoon, Morgan Stanley said, "Total net trading revenues year-to-date in our global high-yield business are positive. Second, the effect of markdowns to our high-yield portfolio taken in the third quarter reduced earnings by less than 4 cents per share. Third, markdowns taken in the current quarter are of approximately the same magnitude."

That level of losses would lop around $90 million off the firm's earnings over two quarters.

The New York-based financial services firm added that it didn't expect any additional markdowns during the rest of the current quarter. A Morgan Stanley spokesman declined to give the overall size of the writedowns.