Morgan Stanley loses $578M in 1Q

Morgan Stanley says it lost $578 million, after paying preferred dividends, in the first quarter, hurt by the deteriorating commercial real estate market. The New York-based bank posted a loss of 57 cents per share for the January to March period. It also lost $1.6 billion in December, and cut its dividend. The first quarter shortfall is sharper than analysts expected. They had forecast a loss of 8 cents per share. It is also worse than last year's first quarter, when Morgan Stanley earned $1.3 billion, or $1.26 per share. In addition to the real estate market, Morgan Stanley was also hit, counterintuitively, by an improvement in the value of its own debt in the first quarter. This improvement caused other assets tied to the rates on that debt to lose value.