Morgan loses $2.37 billion

Morgan Stanley said Wednesday that it lost $2.37 billion during its fiscal fourth quarter as it took a range of losses on assets amid one of the roughest periods for investment banks.

The New York firm, which is aggressively building on its new status as a bank holding company, lost $2.34 a share for the quarter ended Nov. 30. It lost $3.61 billion, or $3.61 per share, a year ago, when it took a $9.4-billion write-down on mortgage-related assets as the housing industry began to spiral downward.

Analysts polled by Thomson Reuters, on average, forecast a loss of 34 cents per share.

Shares of Morgan Stanley rose 37 cents to $16.50.

Morgan Stanley took a wide range of charges and losses during the quarter as the value of many assets held by banks plummeted amid the ongoing turmoil. Asset values also plunged sharply in November, after the federal government reversed course and said it no longer planned to use its $700-billion bank rescue program to purchase troubled assets from financial firms.

Denise Valentine, a senior analyst at Aite Group, said that once the government changed its mind, some companies started selling assets at fire-sale prices to recoup some money on the investments.

Because accounting rules require banks such as Morgan Stanley to mark their asset inventory to current market prices each quarter -- even if the bank did not sell assets -- it had to take losses based solely on end-of-quarter valuations, Valentine said.

Morgan Stanley’s quarterly loss comes just a day after competitor Goldman Sachs Group Inc. reported its first quarterly loss since it went public in 1999.