CITIGROUP

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.

Two analysts expect Morgan Stanley will take a fourth quarter write-down of between $3 billion and $6 billion related to asset-backed securities and collateralized debt obligations.

The former top executive at Citigroup’s wealth management division Todd Thompson said tensions with now departed chief executive Charles Prince were the underlying cause for his departure from the firm in January.

Stocks rose on Tuesday as oil prices topped $97 a barrel and lifted shares of Exxon Mobil Corp and other energy producers, while optimism a day ahead of Cisco Systems Inc earnings drove another rally in technology shares. Investors hunted for bargains among beaten-down bank and financial services shares after the previous session's sell-off left the sector near two-year lows.

Stocks erased gains and were little changed on Tuesday as a brokerage's dour view on Microsoft Corp weighed on technology shares, while investors worried that record crude oil prices could squeeze consumers and corporations.

Fox-Pitt Kelton analyst David Trone on Tuesday downgraded Morgan Stanley shares to in-line from outperform, citing the likelihood the bank will write down asset-backed securities, collateralized debt obligations and other assets by as much as $6 billion.

Central bankers past and present warned on Tuesday of more pain to come for the U.S. economy and that banks worldwide could take several months yet to reveal full losses from U.S. subprime mortgage lending. Former Federal Reserve Chairman Alan Greenspan and billionaire investor George Soros said the downturn in the U.S. housing market had yet to take its full toll on growth.

A tumbling dollar and strong oil prices prompted investors and speculators to buy gold heavily on Tuesday, with the metal hitting a 28-year high and trading about $30 below its record peak.

Citigroup Inc has named veteran financial expert Richard Stuckey to head a new team that focuses on managing its subprime mortgage portfolio, according to an internal memo seen by Reuters on Tuesday.

U.S. stocks fell on Monday amid continuing uncertainty over the health of the financial markets, brought into greater doubt with Citigroup’s huge write-down on losses related to mortgage-backed securities. Citi said Monday it could post as much as $11 billion in additional write-downs losses, without reassuring investors that more write-downs are on the way.

Tokyo-Citigroup Inc. on Monday debuted on the first section of the Tokyo Stock Exchange opening at 4,580 yen, 250 yen higher than the value calculated from closing price from the New York Stock Exchange.

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.

As global banks report larger and larger losses it's becoming apparent the the subprime mess will be around longer than expected.

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.

Britain and France rushed to offer reassurance on Monday that their economies and banking systems would ride out global credit turmoil after Citigroup said it could write off $11 billion of subprime mortgage losses.

Shares in Citigroup Inc rose 5 percent in their debut on the Tokyo Stock Exchange on Monday, a day after the U.S. bank's head resigned to take responsibility for spiraling losses on subprime-related investments.

Gold drifted lower on Monday tracking weaker oil but held above $800 an ounce, with an ailing dollar and positive fundamentals seen helping the metal to touch a record high set in early 1980.

Oil fell more than $2 on Monday after a warning by top bank Citigroup of more write-downs related to risky U.S. mortgages heightened concern over the economic health of the world's biggest fuel consumer.

Shares in stricken British mortgage bank Northern Rock tumbled over 6 percent on Monday amid concerns that potential bidders will steer clear as the turmoil in global financial markets deepens.

Charles Prince resigned on Sunday as chairman and chief executive of Citigroup Inc, as the bank said it may write off $11 billion of subprime mortgage losses, on top of a $6.5 billion write-down last quarter. Robert Rubin, the former U.S. Treasury Secretary who had chaired Citigroup's executive committee, was named chairman, while Sir Win Bischoff, who runs Citigroup's European operations, was named acting chief executive.

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.