[R]10:00AM New York – U.S. stocks declined as JP Morgan and Wells Fargo reported sub-prime loan losses and Intel revenue growth disappointed investors.[/R]

U.S. stocks opened lower after three popular averages fell.

Dow Jones Industrial Average fell 11.50 to 12,490.22, Nasdaq declined 17.17 to 2,400.42, and S&P 500 lost 0.68 to 1,379.86.

Intel (INTC: chart) and JP Morgan earnings report weighed on the market sentiment at the opening. Consumer Price Index in December rose.

The Labor Department reported that the December CPI rose 0.3% and the index excluding food and energy prices gained 0.2% in the month. For 2007 the CPI jumped 4.1% and index excluding food and energy prices rose 2.4%, higher than the target set by the Fed.

Many economists and bond investors have come to believe that the measures of inflation reported by the government understate the inflation in the economy and lag in the rise in prices.

Oracle (ORCL: chart) and BEA Systems agreed to merge after Oracle lifted its offer to $8.5 billion. BEA (BEA: chart) jumped $3.00 to $18.58 at the opening and Oracle fell 20 cents to $21.15.

Intel revenue in the fourth quarter rose 10.5% to $10.71 billion from $9.69 billion from a year ago. Earnings rose to $2.27 billion from $1.5 billion and earnings per share increased to 38 cents from 26 cents a year ago.

Gross margin in the quarter rose to 58%, higher than the earlier projection of 57% in October. Intel forecasted gross margin in the current quarter or 56% and for the fiscal year of 57% with a margin of error of few percentage points.

Intel stock fell $2.67 or 11.4% to $20.02 in the early hours of trading.

Wells Fargo fourth quarter profit fell 38% to $1.36 billion from $2.18 billion and earnings per share dropped to 41 cents from 64 cents a year ago on the revenue rise of 8% to $10.21 billion.

Wells Fargo increased its provision to cover losses from credit defaults jumped three-fold to $2.61 billion.

Wells Fargo (WFC: chart) added $1.42 to $27.91.

JP Morgan Chase (JPM: chart) net income in the fourth fell 34% in the fourth quarter to $2.97 billion from $4.53 billion and earnings per share declined to 86 cents from $1.31 a year ago. Revenue in the quarter rose 7% to $17.38 billion from $16.19 billion.

JP Morgan reported losses from subprime loans and credit losses to $1.3 billion.

JP Morgan (JPM: chart) stock increased $2.60 to $41.71.


[R]6:00AM New York, 6:00PM Hong Kong - Beijing calls off Citigroup bailout by China Development Bank.[/R]

Hong Kong stock indexes traded in negative territory as the contagion of Citigroup’s losses and weaker U.S. retail sales affected market sentiment.

In Hong Kong trading Hang Seng index fell 5.4% or 1,386.93 to 24,450.85, while the Hang Seng China Enterprises index fell 6.6% to 14, 016.12, the biggest since May 2004. A sharp one-day decline not seen since in the last six years hurt property and financial stocks the most.