Stocks Down On Earnings: Nokia Corporation (NYSE:NOK), Morgan Stanley (NYSE:MS)

Nokia Corporation (ADR) (NYSE:NOK) surprised analysts, investors and tech watchers by reporting a smaller-than-expected loss in the third quarter and surpassing all revenue margin forecasts.

The Finnish handset make which is making a bid to recapture its former glory in the mobile handset market, reported a loss of 0.07 euros a share compared to a profit of 0.03 euros in the year-ago period.

Will NOK Hit $5 This Year? Find Out Here

Analysts had forecast a loss of 0.11 euros.

Net cash came in at 3.6 billion euros, down from 4.2 billion in June but ahead of market forecasts of 3.4 billion euros.

Underlying operating profit of Nokia jumped to 323 million euros from 6 million a year earlier, with cost cuts and rising sales helping to beat all analysts' expectations.

Sales of the current range of Lumia smartphones fell to 2.9 million from 4 million in the second quarter with significant slowdowns in China as well as Europe. Average selling prices dropped to 160 euros from 186 euros per phone.

Its new range of Lumia smartphones unveiled in September will start selling from November 1, according to reports.

After the results were announced shares in Nokia jumped more than 8 percent to 2.38 euros in the pre open session, however the stock gapped down and was recently down 4.42% to $2.81.

Meanwhile financial services firm Morgan Stanley(NYSE:MS) reported higher revenues and income on gains in its bonds and asset management businesses.

The bank earned $535 million for common shareholders in July to September, up from $39 million a year ago.

Revenue rose 18 percent to $7.6 billion after excluding the charge. That beat the $6.4 billion that analysts were expecting.

In a statement, CEO James Gorman said the results showed the bank's "balanced, strategically focused" game plan. He said he was "confident in our potential to enhance profitability and increase value for our shareholders in the quarters ahead."

Shares of MS are down 1% to $180.32 in early trade.

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Stifel Nicolaus Analyst Feels that Bank Stock Rally Might End Soon - Morgan Stanley (NYSE:MS), Citigroup Inc. (NYSE:C), ZION

Anthony Davis, a banking analyst and head of the financial institutions team at Stifel Nicolaus is a tad worried about some points that could affect the bank-stock rally in a negative way. According to Davis, the growth rate of banks pertaining to earnings has started to slow and loan growth will also be weak. Revenue will also be influenced by short and long-term interest rates, which will be at an all time low.

The banking industry is up against a tough obstacle. Stocks of banks are not cheap; data at Stifel Nicolaus shows clearly that all the banks in their roster trade at 13 times expected earnings over the next year, which is only 91% of the average from way back in 1995 through a year back.

Morgan Stanley(NYSE:MS) took the lead in Wall Street banks going up by 46 cents or 2.65% to $17.86 on Thursday. Citigroup Inc.(NYSE:C) and Zions Bancorporation(NASDAQ:ZION) moved up by 1.8 %, or 65 cents, to $35.79 and 2.5%, or 55 cents, to $22.41 respectively.

In the S&P 500 index, banks have always ruled the roost among the 10 industry groups within the index. The S&P 500 index has shot up by 7.5% after mid-July and 14.7% overall.  The performance of banks has been consistent for the entire year and they have experienced a jump of 11% 23.8% overall in the above mentioned timelines.

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