Morgan Stanley became the latest investment bank to be stung by a slowdown in trading as clients reduced risk throughout the third quarter.
Morgan Stanley reported a net loss of $91 million, or 7 cents per share, during the third quarter as revenue fell 20 percent and because of some special one-time charges.
During a conference call with analysts, the New York-based bank's chief financial officer Ruth Porat said there were some signs customers were starting to return to the market at the end of the third quarter. However, she remained cautious about whether those early signs would turn into a prolonged period of recovery.
Here's what Porat said during the call:
"Although growth in developed economies continues to be fragile, we are cautiously optimistic about the outlook for the next year.
"First, we have seen signs of activity beginning to pick up in September across our businesses. Corporate balance sheets remain cash-rich and clients are using cash for share repurchase, which is providing some support to the equity markets and for (mergers and acquisitions). And the pace of activity with retail investors ... has also picked up.
"That being said, and given the fragility of the recovery, it is too early to assume that these trends are going to continue."