(October 8 – 10:00 ET) –
Morgan Stanley Dean Witter &
Co. Inc. is sounding the
warning bell about an important
business – its own. The firm has
come out this morning with a
negative view on the retail
brokerage industry.

Morgan Stanley analysts are out
with a downgrade on the industry
overall from a market weight to an
underweighting. It has also cut
its individual recommendations
on rivals TD Waterhouse,
Charles Schwab and
Merrill Lynch from
“Outperform” to “Neutral”.

The firm is reportedly skeptical
on the industry as a whole due to
the extreme pressure coming to
bear on trading costs from the
online business. Morgan Stanley
sees trading costs going to zero
in the next couple of years, and
finds that brokerages haven’t yet
proven that they can migrate to
another way of drumming up
revenues.

– IE Staff