U.S. stocks decline for a second week
J.P. Morgan Chase’s $2 billion trading loss has shares off 9.3%
http://articles.marketwatch.com/2012-05-11/ma...bank-index
NEW YORK (MarketWatch) — U.S. stocks mostly fell Friday to a second weekly decline as a rise in consumer sentiment failed to outweigh J.P. Morgan Chase & Co.’s $2 billion trading loss
Down 1.7% for the week, the Dow Jones Industrial Average (US
JIA) fell 34.44 points, or 0.3%, at 12,820.60, with J.P. Morgan (US:JPM) its heaviest weight, off 9.3%.
Jamie Dimon, J.P. Morgan Chase’s chief executive, called the losses “self-inflicted” in revealing them late Thursday. Read more about the bank’s loss.
“The J.P. Morgan thing has leveled off. Like anything else, it will blow over. It’s the strongest bank by far, and $2 billion is a big deal, but we’ll weather this very easily,” said Chip Cobb, portfolio manager at BMT Asset Management.
The revelation by one of the country’s largest banks “raises a new round of questions about bank proprietary trading,” Fred Dickson, chief investment strategist at Davidson Cos., wrote in emailed comments
It also puts “a handful of banks in the penalty box until the next round of quarterly results hit the tape in two months,” Dickson added.
The S&P 500 Index (US:SPX) shed 4.60 points, or 0.3%, at 1,353.39, with financials getting hit the hardest among its 10 sectors and the index tallying a weekly slide of 1.2%.
Helping lift technology shares, Nvidia Corp. (US:NVDA) reported quarterly revenue and an outlook that beat estimates. Shares of the chip manufacturer rallied 6.4%.
The Nasdaq Composite Index (US:COMP) managed a fractional gain to close at 2,933.82, off 0.8% decline from last Friday’s close.
For every two shares that advanced three fell on the New York Stock Exchange, where nearly 586 million shares traded. Composite volume topped 3.8 billion.
The Thomson Reuters/University of Michigan preliminary index of consumer sentiment advanced to 77.8 from 76.4 in April. The gauge’s most recent reading is its highest since January 2008.
“This market needs confidence; any positive thing we can get out of it will make the next two quarters look better,” said BMT’s Cobb.
Wall Street offered little reaction to a report from the Labor Department that had producer prices falling 0.2% in April, with core prices excluding food and energy up 0.2%.
“The PPI was driven lower by energy costs and crude, which is ultimately a positive for the economy and industrials in particular,” said Simon Paterson, an equity-research analyst at Brown Advisory.
On Friday, both oil and gold finished at 2012 lows, with crude futures (US:CLM2) losing 95 cents, or 1%, to end at $96.13 a barrel and gold futures (US:GCM2) down $11.50, or 0.7%, to end at $1,584 an ounce, their lowest this year.
