Fairfield-based General Electric Co., whose shares have been battered by anxiety over the health of its big loan and lease business, lowered its earnings forecast today, saying the unit's profits were falling and that it was taking action to bolster its reserves.

GE forecast third-quarter profit of 43 cents to 48 cents per share, down from prior guidance of 50 cents to 54 cents per share. For the full year, profit is now forecast between $1.95 and $2.10 per share, instead of $2.20 to $2.30 per share.

GE also is suspending its stock repurchase program. Through the third quarter, GE has repurchased about $3.5 billion. The company also reaffirmed its commitment to maintaining a 'AAA' credit rating, and outlined steps to bolster its capital and liquidity position, including restructuring GE to boost the ratio of industrial earnings to financial profits to 60 percent-40 percent by the end of 2009.

The moves, which GE said were prompted by "unprecedented" weakness and volatility in the markets, come as Wall Street grapples with the collapse of Bear Stearns and Lehman Brothers, the government takeover of insurer AIG, and the fierce debate over a $700 billion plan for Washington to bail out banks weakened by risky mortgage-backed securities.

Shares of GE started the morning in the red but pushed into positive territory as euphoria over a possible bailout deal sent stocks soaring.

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