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US finance houses ahead

Two leading US finance houses, Morgan Stanley Dean Witter and Lehman Brothers, have reported record fourth-quarter earnings, led by increasing profits from investment banking. Their shares declined, though, as US. stocks dropped and analysts questioned if earnings would decline in the months ahead.

Morgan Stanley Dean Witter, the biggest US securities firm in terms of equity capital, said earnings in the three months to November rose 79 per cent to a record $810m, or $1.33 a share. That exceeded analysts' average forecast of $1.03 a fully diluted share. Lehman Brothers' fourth- quarter net income rose 46 per cent to $185m, or $1.30 a share, beating the average forecast of $1.04 a share.