Several rating agencies have affirmed their ratings on Morgan Stanley, but put a negative ratings watch on its Discover Bank credit card division, following the investment bank's announcement this morning that it would spin off its Discover division. Morgan Stanley expects to complete the spin off by the third quarter of 2007.

"The spin off will allow Discover to continue building on its strong brand and significant scale," John J. Mack, Morgan Stanley Chairman and CEO said. "We also believe the spin off will unlock considerable value for the shareholders of Morgan Stanley."

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