Morgan Stanley and Bank of America Kick Off The Earnings Season, While AIG, Yahoo!, and Freeport-McMoRan Grab Headlines

Shares of Morgan Stanley (NYSE:MS) are trending today after the company reported its financial results for the fourth quarter. The company posted revenue of $7.7 billion, beating estimates of $7.67 billion, and adjusted earnings of $0.43 per share, surpassing analysts’ expectations of $0.33 per share. Morgan Stanley’s fixed income division had another disappointing quarter however, reporting net sales of $550 million, down from $599 million a year before. The company’s management has decided to reduce the division’s headcount by 25% and further cut infrastructure costs.

Morgan Stanley (NYSE:MS) gained a vote of confidence from hedge funds during the third quarter, as the number of funds holding Morgan Stanley shares as of the end of September increased to 57 from 48 a quarter earlier. Ric Dillon is bullish on the stock, having increased his investment by 11% during the quarter. His fund, Diamond Hill Capital, reported ownership of 9.02 million shares in its latest 13F filing.

Investors are not too happy with the latest report from Bank of America Corp (NYSE:BAC), as the company posted mixed results for the fourth quarter. Revenue came in at $19.5 billion, falling short of expectations of $19.9 billion, while earnings per share of $0.28 did top analyst estimates of $0.27 per share. Although the stock opened higher, it quickly turned south, and has now slid by nearly 2% today.

“We saw solid customer activity in loan growth, deposits, and wealth management asset flows, and we returned more capital to our shareholders. As we build on this progress, we will continue to invest in the future and manage expenses,” said Brian Moynihan BofA’s Chief Executive Officer.

Hedge fund sentiment towards Bank of America Corp (NYSE:BAC) also gained a boost during the third quarter, with 108 funds reporting a stake in the company as of the end of September, up from 95 as of the end of June. Peter Rathjens, Bruce Clarke and John Campbell, the managers of Arrowstreet Capital, more than doubled their stake in the company, taking it to 27.6 million shares at the end of September.