Morgan Stanley reports larger than expected loss

Unlike Wall Street rivals Goldman Sachs (GS) and JPMorgan Chase (JPM), where huge trading gains and investment banking revenue delivered big profits, Morgan Stanley (MS) said it lost $159 million, or $1.37 a share, from continuing operations in the second quarter, falling short of analysts' estimates.

For the second straight quarter, accounting rules governing how Morgan Stanley must record the rising value of its bonds hurt results. Morgan said that following the rules cost the company $2.3 billion. That offset income from underwriting stock and bond issues and gains on trades made with the firm's own money, which climbed from the first quarter but fell short of results from a year ago.