Morgan Stanley's first-quarter profit dropped nearly 50 percent, hurt by a steep decline in bond trading revenue.

The bond trading business has long been a trouble spot for the bank. The operation generated big losses during the financial crisis and then lagged rivals during a recovery in 2009.

Chief Executive James Gorman is pushing the division to gain market share and improve its performance.

Morgan Stanley posted quarterly net income for shareholders of $736 million, or 50 cents a share, down from $1.41 billion, or 99 cents a share, in the same quarter last year.

Fixed income trading revenue fell across Wall Street in the first quarter after unusually strong results in the year-ago period. But some banks have experienced more weakness than others. Morgan Stanley's revenue for its fixed income and commodities sales and trading unit fell by 35 percent to $1.77 billion.

Goldman Sachs Group Inc posted a 28 percent decline for its fixed income customer trading business, while JPMorgan Chase & Co posted a decline of just 4 percent.

Morgan Stanley said its bond trading results were lower mainly because of weakness in credit products, which typically include corporate bonds and credit derivatives. The bank posted higher revenue in interest rates, and commodities trading improved from a year earlier.

Some businesses performed well for Morgan Stanley. The wealth management group, a joint venture with Citigroup Inc, posted income for Morgan Stanley of $183 million, up 85 percent from a year ago. The group reported a 7 percent growth in client assets, in part because of new asset inflows of $11.4 billion.

Morgan Stanley's results included several special items, including an after-tax loss of $425 million, or 26 cents a share, from the bank's 40 percent stake in a Japanese securities joint venture.

The bank also posted a gain of 30 cents per share from a change in an asset value linked to the bank selling its stake in Revel Entertainment Group, a stalled casino project in Atlantic City, New Jersey.

Morgan Stanley's overall revenue fell 16 percent to $7.64 billion.

Morgan Stanley shares were up 2 percent to $26.55 in premarket trade.

(Reporting by Lauren Tara LaCapra, additional reporting by Dan Wilchins; editing by John Wallace)