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Goldman Sachs,
Morgan Stanley
earnings decline

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Bloomberg News

NEW YORK -- Morgan Stanley Dean Witter & Co. and Goldman Sachs Group Inc., the two biggest equity underwriters and merger advisers, said fourth-quarter earnings fell as slumping stock and bond markets curbed investment banking and led to losses from venture capital.

Morgan Stanley, the largest U.S. securities firm by market value, posted its first decline in nine quarters, and for Goldman it was the first slide since going public in May. The firms' shares were mixed today as investors had anticipated the results by driving their stocks down one-third from their peak Sept. 11. Goldman closed up $3.44 to $89.38 and Morgan Stanley fell 25 cents to $69.

Morgan Stanley said net profit fell 26 percent to $1.21 billion, or $1.06 a share, in the quarter ended Nov. 30, down from $1.63 billion, or $1.42 a share, a year earlier. Goldman Sachs, the third-largest U.S. securities firm by capital, said net income fell $601 million, or $1.16 a diluted share, compared with $756 million, or $1.54 a share.

(Hawaii's Kamehameha Schools owns nearly 5 percent of Goldman Sachs' outstanding stock.)

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