Morgan Stanley reports first-quarter profit of $1.4B

Morgan Stanley said Wednesday its first-quarter profit surged to $1.41 billion on strong results from its trading operations. The investment bank easily topped analysts' expectations.

Morgan Stanley said its earnings, which compare with a loss of $578 million a year ago, also came on a jump in its retail brokerage business - a sign that individual investors might be getting more comfortable with returning to the stock market.

The investment bank, criticized last year for being too conservative as markets recovered, said it had $4.1 billion in sales and trading revenue, almost triple the $1.4 billion of a year earlier. Other banks with large trading operations, including JPMorgan Chase & Co. and Goldman Sachs Group Inc., also used trading profits to beat earnings forecasts. The company's stock rose $1.23, or 4.04 percent, to $31.68 in New York trading yesterday.

Banks have been profiting from low interest rates that allow them to borrow money cheaply and put it into higher-yielding investments such as stocks. Ruth Porat, the bank's chief financial officer, said that Morgan Stanley expects interest rates to remain low, which will help drive business in the coming quarters. She also said the economy is improving. - AP