NEW YORK (CNN/Money) - J.P. Morgan Chase & Co. said Thursday it is setting aside $900 million to pay for lawsuits over the bank's dealings with Enron and to settle charges of conflicts of interest on Wall Street.

The announcement came amid a flurry of financial news from Morgan, which also readied investors for a $400 million charge in the latest quarter as part of its settlement of an Enron Corp.-related surety bond dispute with insurers.

The settlement with 11 insurers will cover about 60 percent of the $1 billion the bank lost from complex financing deals arranged with bankrupt energy trader Enron.

But establishing the $900 million reserve will shave 30 cents a share from Morgan's fourth-quarter profit, the company said. Analysts surveyed by First Call expected the company to earn 36 cents per share, on average, during the December quarter.

After being halted earlier, J.P. Morgan (JPM: up $1.44 to $25.44, Research, Estimates) shares gained more than 5 percent in midday trading amid a stock market rally.

Morgan was among the 9 financial institutions that last month agreed to pay a total of $1.4 billion to settle charges brought by securities regulators that Wall Street put investment banking clients ahead of investors.

The company agreed to pay $80 million to end a probe alleging that brokerage houses issued tainted research and handed out hot stocks to favored clients.

The news from Morgan comes a week after Citigroup Inc. said it will take a $1.5 billion fourth-quarter charge to increase reserves for the settlement with securities regulators and Enron-related matters.

At issue in the Enron matter was whether 11 insurers, including Chubb Corp. (CB: up $1.72 to $53.92, Research, Estimates), CNA Financial Corp. (CNA: up $0.90 to $26.50, Research, Estimates) and Travelers Property (TAP.A: up $0.35 to $15.00, Research, Estimates), had to pay out on bonds issued to guarantee a series of gas trades between Enron and offshore entities set up by New York-based Morgan.

Travelers said Thursday it will pay $139 million as part of the settlement. Liberty Mutual said it would pay less than $12 million.

"It's obviously a positive, because everyone I spoke to said there was no way in heaven or hell J.P. Morgan would win this case," said Richard Bove, an analyst at Hoefer & Arnett.

The bank had argued the deals were covered unconditionally. The insurers said they were misled by Morgan and the deals really were disguised loans.

"We strongly believe our firm acted appropriately in all of the transactions involving the insurance companies," William McDavid, general counsel of the firm, said. "Nevertheless, given the uncertainty of jury verdicts in complex matters, we believe it was prudent to accept this settlement."

A loss in the case would have been a big blow for Morgan, which has about $965 million exposure on the deals on top of about $500 million it already has written off for Enron. The loss would have taken a big bite out of its $2.1 billion profit for the first nine months of last year.

Morgan executives, along with those from Merrill Lynch and Citigroup, have been called before Congress and accused of creating financial transactions that enable now-bankrupt Enron to disguise its true financial condition.

Whether from congressional hearings or the Wall Street settlement announced in December, evidence against Morgan could fuel a rash of investor lawsuits.

In announcing the $900 million reserve, Morgan may have had that in mind but said only that the money was "related to other litigation and regulatory matters."

"This reserve represents management's best estimate, after consultation with counsel, of the current probable aggregate costs associated with these matters," the company said.

Investors hope 2003 will bring a better times for Morgan, which also lost money on loans to Argentina, which defaulted on its debt. The company's stock fell 33 percent last year.  

-- Reuters contributed to this report.