Swiss bank Credit Suisse group, parent of investment bank Credit Suisse First Boston (NYSE:CSR) $23.53 surprised European investors by saying that it expects to take a $450 million pre- tax charge in the current quarter against earnings for private litigation involving "research analyst independence, certain IPO allocation practices and other Enron related litigation," which turned European markets to the downside and hauled U.S. stock futures back to the downside in the overnight session.
In a mid-quarter update, Credit Suisse Group said it expects to post a 1 billion Swiss franc ($728 million) net loss for its Q4 after all the charges, which includes a $250 million loss from the sale of its Pershing unit.
The news from Credit Suisse saw the Swiss Market fall 90 points, or -1.94% to 4,560 and have negative impact on France's CAC 40, which fell 2% to 2,932. Also reversing earlier gains to trade lower into their close is Germany's DAX -2.77% and the United Kingdom's FTSE 100, which is shedding 52 points to 3,684 (-1.4%).
The news out of Credit Suisse also saw S&P futures (sp03h), which traded as high as 891.80 in its overnight session, now trade down 5.60 points from yesterday's close at 882.80. NASDAQ futures (nd03h) are currently off 6 points at 1,003, while Dow futures (dj03h) are lower by 63 points at 8,372.
Fair value for the S&P 500 today is $0.19. That price will not change during the session. HL Camp & Company has their computers set for program buying at $0.24 and set for program selling at $-2.12.
While Credit Suisse's news got the ball rolling for a reversal lower in European markets and U.S. stock futures, U.S. banking giant J.P Morgan Chase (NYSE:JPM) $25.42 reported a Q4 (December) loss of $0.20 per share, which was first thought to be a miss by $0.13 per share. However, Multex, which polls analysts for earnings estimates indicated that their consensus estimate included a $0.43 charge for the latest quarter and had estimates being a 7 cent loss per share, but analysts excluded a $0.13 per share charge for merger and relocation expenses. J.P. Morgan included the $0.13 per share charge in their headline EPS number, which would then have the reported loss of $0.20 coming in line with expectations. Shares of JPM fell to $24.75, or -2.6% in pre-market trading.
Shares of Motorola (NYSE:MOT) $8.75 trade 22-cents higher at $8.97 in this morning's pre-market after topping Q4 consensus estimates of $0.10 per share, when it reported earnings of $0.13 per share late yesterday. The company said revenues rose 3.2% year-over-year to $7.55 billion versus the $7.05 billion consensus. For its upcoming Q1 (March), Motorola said it expects revenues of $6.0-$6.2 billion and EPS in the range of breakeven to $0.02 profit, which was inline with revenue estimates from analysts of $6.1 billion, but slightly below EPS estimates of $0.05 per share.