Shares of Morgan Stanley, owner of the world’s largest brokerage, rallied in extended trading Thursday as the bank was downgraded two levels by Moody’s Investors Service rather than the three-grade cut that the ratings firm said was possible.

The shares climbed 4.6 percent to $14.60 at 5:24 p.m. in New York.

Moody’s had said it might reduce the rating on the New York-based firm by as many as three levels as part of an industrywide review. Morgan Stanley can manage through any potential cut, Chief Executive Officer James Gorman said June 12 at an investor conference in New York.

Donald Jones, a Sterne Agee & Leach Inc. analyst, said in a June 19 note that the most likely outcome expected by bond investors was a three-grade rating cut.