Morgan Stanley shares slide 5% on earnings miss

Morgan Stanley capped off bank earnings season with a thud — thanks to volatility that hit investors in August, leading to a 15% drop in trading revenues

The investment bank, which makes it money on activities like trading and corporate lending, earned $1.02 billion, or 48 cents a share in the third-quarter, down from $1.65, or 59 cents a share earned last year. The bank's revenues of $7.8 billion were also down from the $8.9 billion earned last year.

The results fell short of Wall Street's expectations for earnings of $1.29 billion, or 63 cents a share, on revenue of $8.5 billion, according to data from FactSet.

Morgan Stanley's shares traded down 5.3% to $32.15 a share Monday on the miss.

The bank was hurt by volatile trading that sent investors running for cover in August and September. Other banks hurt by the volatility last quarter, which led to a drop in bond and commodity trading, include Goldman Sachs and JPMorgan Chase.

JPMorgan also warned that Wall Street estimates for the fourth-quarter appear high as the trading slowdown has continued to plague the bank in October.

Stocks, commodities and bonds have taken multiple beatings in recent months amid fears of an economic slowdown in China and uncertainty over whether and when the U.S. Federal Reserve will raise interest rates. That has led to a slowdown in trading activity in fixed-income and commodities.

"We've said what we want to say about this," Morgan Stanley CEO James Gorman said in the conference call, after being barraged by questions about the trading hit. "It is what it is."