Schwab May Not Meet 4th-Quarter Forecasts

In the latest sign of waning enthusiasm among active stock traders, Charles Schwab, the biggest online broker, said Wednesday it may miss analysts’ fourth-quarter profit forecasts and has stopped adding workers because of declines in trading and assets under management.

Schwab’s stock closed at $30.13, down 56 cents, in New York Stock Exchange trading after falling as low as $27.94.

Analysts were expecting earnings of 14 cents a share, according to First Call/Thomson Financial, up about 10% from last year. Analysts from J.P. Morgan, Bear Stearns, and Chase/H&Q; cut their estimates during the day to an average of 13 cents.

San Francisco-based Schwab (ticker symbol: SCH) was the first securities firm this quarter to say the stock market decline is squeezing profits. It may foreshadow an industrywide slowdown. Morgan Stanley Dean Witter (MWD) and Goldman Sachs Group (GS) next week will report fourth-quarter results, which could illustrate how much a slump in securities underwriting and mergers has crimped earnings.

Schwab’s 8-million-plus account holders lost about $172 billion as stocks fell in the last three months. It was the first year-on-year decline in clients’ stock trading in five years.