Bloomberg reports:

Citigroup Inc., the biggest U.S. bank, said third-quarter profit fell 60 percent because of $5.9 billion of credit and trading losses on loans and mortgage-backed securities.

The bank will write down $1.4 billion before taxes on leveraged financing commitments when it reports final figures in two weeks, New York-based Citigroup said today in a statement. It lost $1.3 billion on subprime assets and about $600 million in fixed-income trading, while higher loan-loss reserves contributed to $2.6 billion in credit costs in the consumer-banking business.

This will help accelerate the shift out of value stocks and into growth. All the bad earnings news in recent days, such as Lennar, UBS and now Citigroup, have been value stocks.

According to my research team, 79% of the stocks in S&P 500 are classified as value. However, only 49% of the market cap is classified as value. So if portfolio managers stick with value, it will sink their portfolios relative to the S&P 500.