Morgan Stanley, Dean Witter & Co. and Lehman Bros. Holdings Inc. reported second-quarter earnings that trounced analysts' forecasts, fueled by a surge in corporate takeovers and sales of stocks and bonds. Morgan Stanley, the nation's second-biggest securities firm, said earnings rose 45% to $854 million, or $1.37 a share, from a year ago. Analysts had expected $1.18 a share. The company's return on equity rose to 25%, from 18.3% a year ago, and net revenue advanced 31% to $4.6 billion. Profit jumped 70% in its securities business and gained 29% in its credit card business. Lehman, the fourth-largest U.S. securities firm, said its profit more than doubled to $324 million, or $2.12 a share, from a year earlier. Analysts expected Lehman to earn $1.69 a share. Lehman's return on equity surged to 29.9%, from 12.8% as it kept a tight rein on costs. Its investment banking revenue climbed 80% to $495 million, as junk bond sales surged fourfold to $2.7 billion. Capital markets revenue, which includes trading for the firm's own account, rose 66% to $938 million. Lehman shares, up 48% so far this year, rose 50 cents to close at $76. Morgan Stanley, ahead 35% since Jan. 1, fell 19 cents to close at $78.75. The New York-based firms both trade on the NYSE.