Morgan Stanley earned dollars 224m (pounds 149m), or dollars 2.65 a share, in the quarter ended 31 July, driven by trading revenues of dollars 518m. In the same period a year ago - when its traders accounted for dollars 204m in revenue - the firm made dollars 119m, or dollars 1.31.
Securities analysts had predicted roughly flat earnings - dollars 1.36 a share - for Morgan year-on-year.
The firm's total revenues were dollars 2.5bn compared with dollars 2.1bn in the second quarter of 1992. Investment banking profits were also up sharply, as were profits on merchant banking investments.
But as with Wall Street's other big firms, movement in US interest rates and foreign-exchange rates accounted for the lion's share of Morgan's profits. 'There's no question that the volatility in the fixed-income market is the most important factor behind these big numbers,' Samuel Liss, financial services analyst with Salomon Brothers in New York, said.
Morgan Stanley's shares were up 50 cents at dollars 791 4 in a generally negative trading session in New York yesterday.
Wall Street and the US banks have had a sparkling quarter, thanks to soaring stock and bond markets and steady increases in merger and other investment banking activity.
Final tallies of profits among the big securities firms for the first six months of 1993 will not be available until later this week, but analysts say there is little doubt a new industry record will be set.
Those firms expected to report unprecedented gains include Merrill Lynch, Salomon Brothers and Bear Stearns.
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