Economic Reports Mostly Negative
The Department of Labor said that initial unemployment claims for the week ended March 23 increased by 16,000 to a seasonally adjusted 357,000, from the previous week's upwardly revised figure of 341,000. That's the sharpest rise in unemployment claims so far this year. Economists on average expected initial jobless claims to come in at 340,000, according to Zacks.
Shares of Morgan Stanley have returned 15% this year, following a 28% return in 2012. The shares trade for 0.8 times their reported Dec. 31 tangible book value of $26.81, and for 8.6 times the consensus 2014 earnings estimate of $2.56 a share, among analysts polled by Thomson Reuters. The consensus 2013 EPS estimate is $2.12. Morgan Stanley's stock tends to be among the most sensitive to European economic uncertainty. The company reported that as of Dec. 31, its net risk exposure to "European Peripherals," including Greece, Ireland, Italy, Spain and Portugal, totaled $6.3 billion. The company on March 14 announced that the Federal Reserve had approved its 2013 capital plan, which included no dividend increase or share buybacks, but would include the purchase of the remaining 35% stake in Morgan Stanley Smith Barney, still held by Citigroup. BernsteinResearch analyst Brad Hintz rates Morgan Stanley "outperform," with a price target of $24, and said in a report on Tuesday that "a number of changes arising from the final MSSB buy-in should provide Morgan Stanley with an incremental ~$385 million in earnings in the 12 months following the acquisition." Hintz expects the company's annual earnings-per share-to increase by 20 cents, once Morgan Stanley completes the acquisition.