Morgan Stanley profit drops 18% as deal doldrums persist

(Reuters) -Morgan Stanley’s profit slipped 18% in the second quarter as Wall Street’s deal-making drought stunted revenue from investment banking.

Profit applicable to common shareholders fell to $2.05 billion, or $1.24 per diluted share, for the three months ended June 30, the bank said on Tuesday. That is down from $2.39 billion, or $1.39 per diluted share, a year earlier.

Revenue from investment banking stood at $1.16 billion, in line with last year.

Global M&A activity fell 36% in the second quarter versus a year earlier, according to Dealogic. Still, its climb from the first quarter has sparked hopes of a nascent recovery.

Shares of the investment bank were up 1.4% in premarket trading.