Morgan Stanley

(MS) - Get Report

has reached a deal with

Mitsubishi UFJ Financial Group


, under which Japan's largest bank will invest $9 billion for a 21% stake in the storied but struggling U.S. company.

The investment comes as Morgan Stanley scrambles to stabilize its shares, which have fallen more than 60% in the last year amid the global credit crisis.

Morgan Stanley Chairman and CEO John Mack says the investment is "a strong endorsement of Morgan Stanley's world-class global franchise."

As investors shun any type of risk, especially related to financial companies, even Morgan Stanley's seemingly flawless rival

Goldman Sachs

(GS) - Get Report

has been forced to sell equity stakes in itself on terms that would have been unthinkable even a month ago.

In a further effort to restore market confidence in their businesses, both Morgan Stanley and Goldman on Sept. 22 became bank holding companies.

Those moves came after much more dire consequences for other financial companies in the preceding two weeks. Already this month,

Lehman Brothers

filed for bankruptcy,

Fannie Mae


Freddie Mac


American International Group

(AIG) - Get Report

were bailed out by the government and

Washington Mutual

(WM) - Get Report

was seized by federal regulators and its deposits sold to

JPMorgan Chase

(JPM) - Get Report


Morgan Stanley had a week ago been talking to

Wachovia Bank

(WB) - Get Report

about a possible merger but abandoned those discussions after becoming a bank holding company.


on Monday sold its banking operations to


(C) - Get Report


Morgan shares have swung wildly up and down in the last two weeks, reaching a low of $11.70 on Sept. 18 and a high of $31.65 just two trading days later on Sept. 22.

Despite the announcement, Morgan Stanley shares were down 11.8% to $21.82 in recent trading Monday.