Capital One disappoint investors

--Jan. 10 (Bloomberg) -- Capital One Financial Corp., thelargest independent U.S. credit-card issuer, reduced its full-year profit forecast by about 20 percent because of swellingloan losses in a weakening U.S. economy. The lender fell 7.7percent to $40 in early trading. --The company expects 2007 profit of $3.97 a share, down froma previous forecast of about $5. The decline was caused by $1.9billion of loan-loss provisions (1.2 bil charge off and 700 mil allowance) and $80 million in legalreserves in the fourth quarter, McLean, Virginia-based CapitalOne said in a statement today. --Capital One said it expects fourth-quarter profit of about60 cents a share, which includes a 25-cents-a-share loss relatedto the shutdown of its GreenPoint Mortgage unit. The companyearned $1.14 a year earlier. It posted an $81.7 million third-quarter loss, the first since 1994, after closing its mortgagebusiness and cutting 1,900 jobs. --The $1.9 billion provision partly reflects higherdelinquencies and charge-offs. The rate of loans that were 30 days or more overdue in December rose to 3.87 percent, comparedwith 3.68 percent the company reported a month earlier. Charge-offs, or loans the company deemed uncollectible, in the U.S. credit-card segment rose to 5.74 percent from 5.34 percentthe month earlier. --Credit-default swaps on Capital One Financial Corp. climbed 37 basis points to 415 basis points, according to broker PhoenixPartners Group in New York. Contracts on its banking unit rose30 basis points to 380 basis points. An increase indicates theperception that credit quality is worsening.