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The credit crisis deepened on Friday as Wachovia Corp reported a potential $1.7 billion loss on mortgage-related debt, while credit card company Capital One Financial Corp said more customers are missing payments.

Morgan Stanley Chairman and Chief Executive John Mack has tapped co-President Zoe Cruz, a long-time lieutenant who oversees trading and banking, as the leading candidate to succeed him, a person familiar with the situation said on Friday.

Wachovia Corp said on Friday it suffered a $1.1 billion loss on subprime mortgage-related debt in October, while Capital One Financial Corp said more customers are having trouble paying their bills as the U.S. credit crisis deepened.

Wall Street banks are in for about $64 billion in total write-downs related to collateralized debt obligations, as banks have likely not reported the full extent of their losses, according to Citigroup research.

Morgan Stanley on Wednesday said it has suffered a $3.7 billion loss stemming from its U.S. subprime mortgage exposure, which it expects will reduce fourth-quarter earnings by about $2.5 billion. The Wall Street investment bank said the loss occurred in September and October, and might change before its fiscal quarter ends this month.

Stocks fell on Monday after Citigroup's warning of billions more in loan losses compounded fears that the credit crunch could get worse. The news sparked a sell-off in shares of other financial companies as investors questioned which among them would be the next to reveal damage from the meltdown in the U.S. housing and subprime mortgage markets.

Fear and mistrust gripped Wall Street on Monday after Citigroup's CEO quit in the wake of mounting credit losses and an influential money manager called the subprime mortgage market a $1 trillion problem.

Futures on benchmark U.S. stock market indexes fell before Wall Street's opening on Monday, with the focus on Citigroup after news of CEO Charles Prince's resignation. The largest U.S. bank said it may write off $11 billion of subprime mortgage losses on top of a $6.5 billion write-down last quarter.

Asian stocks eased on Monday with financial shares extending their slide as persistent credit worries offset a positive U.S. employment report, which showed twice as many jobs as expected were added last month.

Investors banking on more interest-rate cuts may get some clues about what comes next from Federal Reserve Chairman Ben Bernanke, who testifies before the Joint Economic Committee of Congress on Thursday.

Leading European bank stocks tumbled on Friday as worries mounted that the U.S. subprime crisis has taken a sharp turn for the worse and will force another round of hefty writedowns of bank exposures.

The dollar dropped to a record low against the euro and a major currency basket on Friday, on persistent worries about credit and unreported losses at financial firms, which overshadowed a strong U.S. payrolls report.

Stocks fell on Friday as gains from an unexpectedly strong jobs report were quickly overwhelmed by fears of more fallout from the credit crisis.

Large U.S. banks and brokerages will suffer additional write-downs of more than $10 billion in the fourth quarter as deteriorating credit trends continue to undercut the value of subprime mortgages and related securities, a Deutsche Bank analyst said.

In a bid to cut its exposure to mortgage-backed securities, Merrill Lynch & Co engaged in deals with hedge funds possibly designed to delay its heavy losses, the Wall Street Journal reported Friday in its online edition, citing sources close to the matter. Shares of Merrill, which ousted Chief Executive Stan O'Neal earlier this week, fell 6 percent on Friday in early trading on the New York Stock Exchange. Shares are down 37 percent this year.

When U.S. banks JPMorgan and Merrill Lynch were hired to handle Kirin Holdings' purchase of a local drugs firm, it was a slap in the face for Japanese banks used to winning most domestic takeovers.

Credit Suisse said third-quarter profit at its investment bank was all but wiped out by writedowns, leading to a 31 percent fall in group net earnings to 1.3 billion Swiss francs ($1.12 billion).

Deutsche Bank warned on Wednesday its biggest money spinner, investment banking, would stay sluggish after a global market crunch pushed the business into the red for first time in half a decade.

An investor lawsuit has been filed against Merrill Lynch & Co Inc, contending that the company issued false and misleading statements about its exposure to risky mortgage investments, the plaintiffs' lawyers said on Tuesday.

Merrill Lynch agreed to a retirement package with its embattled Chairman and chief executive Stan O’Neal less than a week after the company posted its biggest quarterly loss ever, giving him $161.5 million in stock and benefits, but no bonus for 2007.

Merrill Lynch & Co Inc ousted Chairman and Chief Executive Stan O'Neal on Tuesday, just days after reporting the biggest quarterly loss in the company's history, making him the highest-ranking casualty in the U.S. subprime mortgage crisis. Board member Alberto Cribiore will be interim chairman while day-to-day operations will be overseen by the firm's co-presidents, Ahmass Fakahany and Greg Fleming.

Oil leapt to a record high for a third day on Monday, surpassing $93 as investors bet on another U.S. interest rate cut this week, the dollar struck new lows and Mexico briefly halted one-fifth of its oil production.

The anticipated departure of Merrill Lynch & Co Inc Chief Executive Stan O'Neal would mark a surprising flameout in a career that had been impressive in its ascent.

Oil leapt to a record high for a third day on Monday, surpassing $93 as Mexico briefly halted one-fifth of its production and the U.S. dollar struck new lows. Oil prices have soared by more than a third since mid-August as a stand-off between Turkey and Kurdish rebels, dollar weakness, easing interest rates and winter supply fears attracted a fresh wave of investment capital.

As Merrill Lynch & Co Inc's board deliberates the fate of Chairman and Chief Executive Stan O'Neal, a leading contender for the job on Sunday said he is not aware of being a candidate.

Retail stocks jumped on Friday, with Family Dollar Stores, and Big Lots among the gainers.

Merrill Lynch, the world’s largest brokerage, saw its stock price soar on Friday amid speculation that its Chairman and Chief Executive Stan O’Neal would be forced out and that the company could be acquired.

In the weeks after Wall Street returned from the Labor Day holiday, the credit market picture appeared to brighten, with loans moving through the system and banks reporting numbers not nearly as bad as some feared.

As fallout from the summer credit crunch spreads, Wall Street faces more job cuts -- and smaller bonuses. Investment banks have announced thousands of jobs cuts as investors stopped snapping up risky corporate loans, mortgage securities and complex asset-backed securities.