Morgan Stanley lost money during the first quarter because a quirky accounting rule cost the bank $2 billion, but excluding that special item, its earnings rose on stronger wealth-management revenue and cost cutting.

The Wall Street investment bank reported a loss of $119 million, or 6 cents per share during the period, compared with a profit of $736 million, or 50 cents per share, in the year-ago period.

Excluding the special accounting item, known as debt valuation adjustment, or DVA -- which requires companies to reflect changes to their own debt values, leading to charges when values rise and gains when values decline -- Morgan Stanley would have earned $1.4 billion, or 71 cents per share.

Those figures compared with year-ago earnings of $1.1 billion, or 59 cents per share, excluding DVA.

(Reporting By Lauren Tara LaCapra; Editing by Maureen Bavdek)