Bond Trading Is Reviving, Boosting Wall Street
One of Wall Street's most important profit engines is revving back up.</br></br>Rising appetites for borrowing and investing are fueling a bond market revival, lifting revenue at Wall Street firms that took a beating last year.</br></br>For the first time in a year, traders and bankers are optimistic following a dark second half of 2011. Layoffs, pay cuts and public outrage against the financial industry undermined morale at banks and securities firms, while economic malaise throttled banking and trading businesses. But with investors and companies putting more money to work, the mood is brightening.</br></br>Gains in the financial firms' fixed-income businesses, which can account for as much as half of revenue, are putting companies including Goldman Sachs Group Inc., Morgan Stanley and the J.P. Morgan unit of J.P. Morgan Chase & Co. on track to report their strongest numbers since the first quarter of 2011, said bankers and analysts.</br></br>The clouds over the industry have only partly cleared. Businesses such as deal making remain depressed. Many traders and bankers still worry about Europe's debt woes and regulatory risks in the U.S. With three weeks left in the first quarter, overall revenue at many securities firms is expected to be lower than a year ago.