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Another subprime shoe has dropped -- this time at

Morgan Stanley

(MS) - Get Morgan Stanley Report


The brokerage firm announced late Wednesday that it would write down the value of its subprime mortgage-related exposure by $2.5 billion, due to the "continued market deterioration" since August.

Morgan Stanley said the actual hit to its fourth-quarter results will depend on future market developments and could differ from the amounts noted.

"It is expected that market conditions will continue to evolve, and that the fair value of these exposures will frequently change and could further deteriorate," the company said.

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Speculation that Morgan Stanley would soon dash investors' hopes that the company had gone relatively untouched in the subprime mess

weighed on the stock Wednesday, contributing to the eventual broad selloff in the market.

Shares of Morgan Stanley finished 6% lower to $51.19.

A story in Wednesday's

Wall Street Journal

cited two analysts providing a range of $3 billion to $6 billion on a possible Morgan Stanley writedown.

Morgan Stanley's announcement below the midpoint of that range -- $3.7 billion before taxes -- seemed to help shares after hours. The stock was recently up 81 cents, or 1.6%, to $52.