Market Updates: Citigroup Inc. (NYSE: C), Wells Fargo & Co. (NYSE: WFC), U.S. Bancorp (NYSE: USB), Morgan Stanley (NYSE: MS)

Citigroup Inc. (NYSE: C) canceled a planned $4.5 million renovation of its main office in Brazil that included an area for entertaining clients and a landscaped terrace called a "suspended garden." The New York company had hired corporate-architectural firm Athié Wohnrath Associados to overhaul three floors of its headquarters in São Paulo and was set to begin the renovations soon, according to people familiar with the matter. The job was supposed to be completed by early 2010, including a 1,000-square-foot office with a panoramic view for Citigroup’s top executive in Brazil. "We need it to compete," a senior executive said about the project Tuesday, describing it as an important way to impress banking clients and use Citigroup’s real estate more efficiently. But on Tuesday afternoon, a person familiar with the situation said the renovation had been reviewed by senior executives, who decided to shelve the project. The reversal underscores the sensitivity inside Citigroup about its spending habits, since the bank has gotten $45 billion from the U.S. government, a 34%-owner of the company’s common stock. –The Wall Street Journal

Wells Fargo & Co. (NYSE: WFC) and U.S. Bancorp (NYSE: USB) posted earnings that trounced Wall Street expectations, helped by outsized revenue from underwriting mortgages, but it is not clear how long that bonanza will last. U.S. mortgage applications have fallen 15 percent so far this month, according to an industry trade group. Declining application volume usually translates to lower underwriting activity. Wells Fargo said it had $3.1 billion of mortgage banking income before taxes, of which $1.1 billion was linked to making home loans. About $1.5 billion of that income was due to gains on hedges and increases in the value of a type of home loan asset known as "mortgage servicing rights." The company reported net income for common shareholders of $2.6 billion, or 56 cents a share. That compares with analysts’ average estimate of 37 cents a share.. It earned $1.6 billion, or 49 cents, in the year-ago quarter. –Reuters

Raj Rajaratnam, the billionaire founder of Galleon Group charged last week by federal prosecutors with insider trading, told investors he will liquidate his hedge funds. Galleon, which managed about $3.7 billion, said it was exploring various alternatives for the business, according to a letter sent to investors today. New York-based Galleon has been approached by unidentified parties interested in buying the firm and an undetermined amount of its assets, according to a person familiar with the firm. -Bloomberg

Boeing reported a bigger loss than analysts had expected, and sales also fell more than the estimates. The company’s $1.6 billion loss — $2.23 a share — was 30 cents a share worse than the $1.93 analysts expected. And Boeing’s revenue of $16.7 billion was $500 million too light compared with what analysts had forecast. The biggest shocker was the huge drop in its guidance for 2009 earnings. Earlier, Boeing had suggested it would earn between $4.70 and $5 a share. But Wall Street expected about half that — $2.34. Now, not only did Boeing cut its earnings forecast by about 71 percent but its new expectations — $1.35 to $1.55 — fall as much as 42 percent below what Wall Street expected. –Daily Finance

U.S. Bancorp posted $276 million of mortgage banking revenue, up 350 percent from a year earlier. The bank posted net income for common shareholders of $583 million, or 30 cents a share. That compares with $557 million, or 32 cents a share, in the year-ago quarter. Analysts had forecast 27 cents a share. –Reuters

Morgan Stanley (NYSE: MS) returned to profitability for the first time in a year as income from its investment banking operations offset losses in commercial real estate. The New York-based bank earned $498 million in the July-September period, after losing $13.18 billion during the last three quarters combined. Investors reacted by sending Morgan Stanley stock up sharply. The company’s shares jumped $1.30, or 4 percent, to $33.82 in early trading. -Forbes

-Jutia Group