American Express said it recorded a $748 million provision for credit losses, down 47% from the year-earlier period. The decline reflected continued improvement in credit quality during the latter part of 2009, American Express said. Also after Thursday's closing bell, Capital One Financial ( COF) posted a fourth-quarter profit of 83 cents a share, also on lower provisioning levels for loan losses. Howeverl, American Express shares were down 8.5% to $38.56 and Capital One fell 11.1% to $37.97 after FBR Capital Markets analysts cut their earnings estimates, citing shrinking margins and new U.S. credit-card regulations. On Friday, SunTrust Banks ( STI) notched a fourth-quarter loss of 64 cents a share, although that number shrank from the year-ago loss of $1.07 a share and was narrower than the Thomson Reuters average estimate for a loss of 75 cents a share. Revenue rose just over 1% to $1.95 billion, also that was below the consensus target of $2.06 billion. SunTrust dipped 0.2% to $24.47. Meanwhile, BB&T ( BBT) reported a fourth-quarter profit of 27 cents a share, which was slashed nearly in half from a year ago but still better than the Thomson Reuters average estimate. The bank said its provision for credit losses rose by $197 million from a year ago to $725 million. BB&T was falling 3.2% to $28.15. Huntington Bancshares ( HBAN) rose 0.8% to $4.57. Earlier, the bank said its fourth-quarter loss narrowed to 56 cents a share, although that was worse than analysts had expected. Although Huntington expanded its loan-loss reserve to $894 million, shares traded higher after the bank said it expects to return to profitability some time during 2010.
Steve Ricchiuto, MZUHO Securities chief economist, and Bob Michele asset management global CIO with JP Morgan (JPM), joined BloomberTV's 'Bloomberg GO' to discuss the economy and the Fed raising rates.