us futures signal fall after merril

LONDON, Jan 11 (Reuters) - U.S. stock futures fell on
Friday, pointing to a fall on Wall Street later as reports of
worse-than-expected subprime-related losses at Merrill Lynch
suggested the credit crisis is far from over.

By 0957 GMT March Dow Jones , S&P and Nasdaq 100
futures were down between 0.3 and 0.5 percent.

U.S. benchmark indexes rose on Thursday after sources
familiar with the matter said Bank of America was in
talks to buy struggling mortgage lender Countrywide Financial
, which investors hoped would mark a turning point for
lenders and home finance companies battered by the slump in the
housing market.

In Europe, Countrywide shares were the most actively traded,
rising 30 percent from their last close in Frankfurt to 4.75
euros. Countrywide shares rose by more than 50 percent on the
New York Stock Exchange on Thursday to $7.75.

BoA shares were up 2.1 percent from their last close in
Frankfurt at 26.54 euros . Shares in the second-largest
U.S. bank gained 1.5 percent in New York on Thursday.

By Friday some of this optimism was tempered by a report in
the New York Times of a potential loss of $15 billion for
Merrill Lynch, which topped the $12 billion in losses analysts
had expected.

"It is a big number, no question about it, but it's going to
be just one more piece of the jigsaw and shouldn't really change
our view significantly on where we are going on this particular
issue," said Commerzbank economist Peter Dixon.

"We've probably seen write-offs of a quarter to a third of
the total of what we're likely to get, and the key for markets
in the course of 2008 will be the frequency with which this news
hits the market and the magnitude of the losses."

Merrill reports earnings next week and is expected to
disclose a huge write-down stemming from its investments linked
to U.S. subprime debt products.

The report triggered a rise in safe-haven currencies such as
the Swiss franc and the low-yielding Japanese yen
against the dollar.

U.S. shares have got off to one of the worst starts to the
year in history as the fear of economic recession and declining
corporate earnings has snuffed out investor appetite for any
stocks exposed to the growth cycle.

Federal Reserve Chairman Ben Bernanke said on Thursday the
central bank was ready to take aggressive measures to support
the U.S. economy against the collapse in the housing market.

On Thursday the Dow Jones industrial average <.DJI> ended up
117.78 points, or 0.92 percent, at 12,853.09. The Standard &
Poor's 500 Index <.SPX> gained 11.2 points, or 0.79 percent, to
1,420.33. The Nasdaq Composite Index <.IXIC> was up 13.97
points, or 0.56 percent, at 2,488.52.

Data releases for Friday include December import and export
prices as well as the November international trade balance.

The trade deficit is expected to have grown for a third
consecutive month to to its widest since July, fuelled by record high oil prices.