Morgan Stanley said on Wednesday its third-quarter earnings fell as the broad selloff in mortgage and corporate loan markets this summer delivered a $940 million blow to the broker.
The No. 2 investment bank by market value said earnings from continuing operations fell 7% to $1.47 billion, or $1.38 a share, in the quarter ended Aug. 31, from $1.59 billion, or $1.50, a year earlier. Both periods exclude results from Discover Financial Services, a credit card company spun off in June.
On that basis, Morgan Stanley fell short of the average analyst estimate of $1.54 a share, according to Reuters Estimates.
Wall Street suffered its worst summer in years as a slowdown in housing markets triggered a broader credit crunch that hammered the value of mortgages, asset-backed securities and corporate loans earmarked for buyouts.