Options Wonderland

[The_Game]

LOl just trying to be a little optimistic! I don't know what is going to happen at this point. Looks like a short term rally coming but that may be about it. I have a feeling we will run up real fast then drop like a rock once again. My credit card play is starting to show it's head more and more. Even Amex getting hit. Meantime, americanbulls has a buy confirmed on SPY, DIA, and QQQQ. WEEEEEEEE


Amex, Capital One to miss EPS views on card losses
Thursday January 10, 5:28 pm ET
By Jonathan Stempel and Michael Flaherty

NEW YORK (Reuters) - American Express Co (NYSE:AXP - News) and Capital One Financial Corp (NYSE:COF - News), the largest independent U.S. credit card companies, projected profits below analyst forecasts on Thursday, citing mounting consumer loan losses as the U.S. economy slows.

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The forecasts show how the housing slump, tighter credit, high oil prices and rising unemployment have made it harder for many consumers to pay their bills. This has caused credit problems to widen beyond mortgages and affect other forms of debt, including credit cards and auto loans.

The shares of both companies fell.

American Express, based in New York, will take a $440 million charge, or $275 million after taxes, to boost reserves for bad loans.

It also said it has a "cautious" outlook for 2008, when it expects earnings per share to rise 4 percent to 6 percent. That is down from the 16 percent increase in operating profit that it sees for 2007.

Chief Executive Kenneth Chenault said in a statement that, while the company benefited from a focus on wealthy customers, "we did see some negative credit trends among U.S. consumers during December, particularly in California, Florida and other parts of the country most affected by the housing downturn."

American Express said the charge will result in profit per share of 70 cents to 72 cents for the fourth quarter and $3.38 to $3.40 for the year.

Analysts on average expected profit per share of 87 cents and $3.53 for the respective periods, Reuters Estimates said.

Capital One lowered its full-year profit forecast to $3.97 per share from $5.00, its third reduction in nine months.

It also projected fourth-quarter profit of 60 cents per share and 85 cents per share excluding a charge tied to GreenPoint Mortgage, a unit it closed in August.

The McLean, Virginia-based company said it set aside $1.9 billion for bad loans in the fourth quarter, reflecting higher losses on U.S. credit card and auto loans and deterioration in $700 million of home equity lines of credit from GreenPoint.

It also boosted its forecast for full-year charge-offs to $5.9 billion from a range of $4.9 billion to $5.5 billion.

Analysts on average had expected profit per share of $1.51 for the fourth quarter and $4.98 for the year.

Capital One acquired GreenPoint in December 2006 when it paid $13.2 billion for Melville, New York's North Fork Bancorp Inc.

Earnings are also expected to fall at most other major U.S. financial companies when they report fourth-quarter results later this month.

Capital One revealed its earnings forecast at midnight, while American Express announced its forecast after U.S. markets closed on Thursday.

American Express shares fell $2.92, or 6 percent, to $46 in after-hours trading, after dropping 16 cents to $48.92 during regular trading. Capital One shares fell $1.43, or 3.3 percent, to $41.49 in after-hours trading, after dropping 43 cents to $42.92 during regular trading.

(Reporting by Michael Flaherty and Jonathan Stempel; Editing by Andre Grenon)