NEW YORK (AP) _ Fourth-quarter profits for brokerage powerhouse Morgan Stanley Dean Witter & Co. fell 28 percent because of the weak investment banking and stock sales climate, the company said Wednesday. But the outcome was better than analysts expected.

For the three months ending Nov. 30, Morgan Stanley reported net income of $870 million, or 78 cents per share, down from $1.2 billion, or $1.06 per share, a year ago.

Analysts surveyed by Thomson Financial/First Call had expected earnings of 66 cents a share.

Revenue fell 17 percent to $4.6 billion for the quarter from $5.4 billion a year ago.

Like other brokerages, Morgan Stanley was hurt by a steep loss in fees from its lucrative business arranging mergers and acquisition deals and underwriting new stock issues.

In a joint statement, chief executive Philip Purcell and president Robert Scott said the company has experienced ``a difficult year, with the economic downturn and the extraordinary events of Sept. 11.''

Company executives believe they will face a difficult business climate in the first half of 2002, but that sour market conditions may have stabilized, chief financial officer Stephen Crawford told reporters in a conference call.

``I think we feel the trends have bottomed and are probably going to go up from here,'' Crawford said. ``It feels like there's more stability and health in the markets than there was three months ago.''

For the year, Morgan Stanley's net income fell to $3.6 billion, or $3.19 a share, 34 percent below last year's income of $5.5 billion, or $4.73 a share.

Morgan Stanley shares rose $2.23, or more than 4 percent, to close at $55.79 in trading Wednesday on the New York Stock Exchange.

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