NEW YORK (
has placed a hiring freeze in its investment banking division, a person familiar with the issue told
The news was first reported by Charles Gasparino of
Fox Business News
. Morgan Stanley also apparently ruled out layoffs through the end of the year, according to a
Morgan Stanley's hiring freeze includes its institutional side of the business, which encompasses sales and trading.
The report comes as analysts are expecting weaker third quarter earnings from the investment banks due to weaker trading activity in the quarter.
reported disappointing third-quarter earnings last week on weak trading results.
The hiring freeze will not affect brokers within Smith Barney, Morgan Stanley's joint venture with
A Morgan Stanley spokeswoman declined to comment.
Morgan Stanley shares were falling 0.7% to $24.97, shortly before the closing bell.
--Written by Laurie Kulikowski in New York.
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