Washington Mutual shares closed lower Friday, ending an erratic session marked by big gains and steep losses, as the market weighed reports of a possible deal and the bank's assurances that it has enough capital against doubts raised by two debt-ratings agencies

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NEW YORK — Washington Mutual shares closed lower Friday, ending an erratic session marked by big gains and steep losses, as the market weighed reports of a possible deal and the bank’s assurances that it has enough capital against doubts raised by two debt-ratings agencies.

Shares fell 10 cents, or 3.5 percent, to end at $2.73, after fluctuating between a low of $2.43 and a high of $3.29 during the session.

Shares spiked in midafternoon trading after reports from American Banker and Reuters that the Seattle-based bank was in “advanced” talks with JPMorgan Chase & Co. about a possible deal.

According to a person close to JPMorgan Chief Executive Jamie Dimon, however, the bank is not in talks with WaMu. The person spoke on condition of anonymity given the sensitivity of the matter. Dimon would not be interested in acquiring WaMu without a clearer picture of the risk in the bank’s loan portfolio, the source said.

JPMorgan has in the past expressed interest in expanding its retail franchise to the West Coast, where WaMu’s deposit base is concentrated.

WaMu spokeswoman Olivia Riley said the bank does not comment on rumors.

The company’s stock lost 36 percent this week and is down 93 percent in the past year.

Investors remain wary about buying financial stocks in a climate where the spiraling credit crisis already has felled one major investment bank, Bear Stearns, and brought another, Lehman Brothers Holdings, to the brink of a possible fire sale. In addition, 11 retail banks have been seized by the government.

Wall Street is contemplating WaMu’s future after the nation’s largest savings and loan pre-released some third-quarter financial metrics in an attempt to reassure the market late Thursday.

The bank insisted it has adequate capital to fund its operations even as it announced another multibillion dollar write-down on bad mortgage loans.

But ratings agencies Moody’s and Fitch cautioned that WaMu may not be able to raise additional funds. However, some on Wall Street, including Goldman Sachs analyst Brian Foran, said the company may have enough cash to forgo a capital infusion.

“Capital and reserves seem to be stable in the quarter, thus, even though losses continue to deliver body blows to the bank, the equity base is absorbing the pain and another capital raise might be avoidable,” Foran wrote in a note to clients.