Market Shrugs Off Morgan Stanley Report
NEW YORK (
) --
Morgan Stanley
(MS) - Get Morgan Stanley Report
shares traded higher Wednesday despite a
Wall Street Journal
report saying the securities firm lost $5.4 billion in a private equity real estate fund.
Citing documents that Morgan Stanley sent to investors, the
WSJ
said the $5.4 billion in losses came on multiple investments, including deals involving the European Central Bank's headquarters in Frankfurt, a large development property in Tokyo, and several hotel investments.
The stock, however, was finding buyers in afternoon action, rising 2.3% to $31.18 on volume of 15 million. While strong results from
JPMorgan Chase
(JPM) - Get JPMorgan Chase & Co. Report
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were lifting the bank sector as a whole, it's also fair to say investors appear to be taking the fund's loss in stride.
The
WSJ
report stated prominently on the front page of its "Money and Investing" section that the losses "continue to be a distraction" for Morgan Stanley but the more important detail, as far as investors are concerned, was buried toward the end of the story on page 8. "By mid-2009, Morgan Stanley had fully written down its exposure to reflect deep losses in the fund," the article states, citing a person familiar with the matter.
For what it's worth, I also spoke to a "person familiar with the matter," who told me that the investments were written down by the
end
of 2009. Either way, it's ancient history as far as investors are concerned.
Morgan Stanley is set to report its fourth-quarter numbers next week. As is nearly always the case when securities firms like Morgan Stanley and
Goldman Sachs
(GS) - Get Goldman Sachs Group, Inc. Report
report their results,
the big X-factor will be trading.
--
Written by Dan Freed in New York
.
