Wednesday's Headlines: JP Morgan warning foreshadows weak quarter on Wall Street

Wall Street firms are having a tough quarter and the revenue warnings are beginning to come in, the New York Times reports.

JP Morgan Chase was the first to ring the alarm bell when it reported its third-quarter trading revenue is expected to drop 8% from same period a year ago, while investment banking is seen falling by a third. The Times notes that JP Morgan was one of the first banks to warn about failing mortgage loans ahead of the financial crisis.

"There are still 13 trading days left in the third quarter ending Sept. 30, and Wall Street firms will not release their final numbers until the middle of next month," The New York Times writes. "But a sharp fall-off in summer trading seems poised to weigh heavily on the banks' earnings - and perhaps accelerate another round of layoffs expected in the coming months."

Trading revenue is expected to fall for the second consecutive quarter, by around 7% from the previous year, according to Credit Suisse analysts. Bank of America, Citigroup, Goldman Sachs and Morgan Stanley are among the banks likely to suffer, the newspaper notes.

Other News:

PNC, US Bancorp and TD Bank may benefit, grow as Bank of America sheds assets. [BusinessWeek]

Nomura cuts costs, to slash 5% of jobs in Europe, some in Asia [Wall Street Journal]

Three years later, Bank of America's Merrill Lynch acquisition not as profitable as Barclays' Lehman purchase. [DealBook]

BNP announces restructuring; cuts dollar liquidity needs, plans to slash assets. [Dow Jones News Wires]

Moody's cuts France's Credit Agricole, Societe Generale ratings on Greek exposure. [Bloomberg]

Jon Corzine's MF Global to cut global equities business as it focuses on commodities investment-banking. [MarketWatch]

Germany's Commerzbank sued by 10 employees who say they're owed $7.7 million in bonuses. [Bloomberg]

Caxton founder Bruce Kovner to retire, to be succeeded by CIO Andrew Law. [DealBook]

Bank of New York Mellon's costly forex trades for pension funds raise suspicions. [Wall Street Journal]