Stocks rally on banks, China
Shares jump as investors hope for stimulus in China. JPMorgan beats earnings expectations but sees its trading loss nearly triple. Wells Fargo earnings beat estimates.
By Andrea Tse
Stocks surged Friday as investors weighed China's gross domestic product growth against U.S. bank earnings and economic data.
JPMorgan Chase (JPM) reported second-quarter earnings of $1.21 a share on revenue of $22.9 billion, topping the average expectation for 70 cents a share on revenue of $21.8 billion.
Second-quarter results included a $4.4 billion pretax loss, amounting to 69 cents a share, from bad derivatives trades and a $1 billion pretax benefit, equaling 16 cents a share, from securities portfolio gains. The bank's chief financial officer said the bank also lost an additional $1.4 billion in the first three months of the year from the trading blunder, bringing the total derivatives trading loss to $5.8 billion, or nearly triple the original estimate of $2 billion.
JPMorgan also said it's restating its first-quarter earnings lower to reflect the impact of attempts to mask the extent of its trading losses.
China's year-over-year economic growth fell to 7.6% in the second quarter, the slowest rate since the first quarter of 2009, marking the sixth straight quarter of declines, as expected, and stirring hopes for economic stimulus. Capital spending and domestic consumption helped promote growth, but exports weighed down the overall figure.
"However, the official report contained a piece of good news, which was that quarterly growth quickened to 1.8% quarter over quarter from 1.6% in Q1, which was stronger than median expectations," said Klaus Baader, a senior economist at Societe Generale. "While not too much emphasis should be placed on this, it may be a sign that growth has already bottomed in Q1."
In U.S. economic news, the Labor Department reported that the producer price index rose 0.1% in June after falling 1% in May, which was better than the decline of 0.5% that economists were expecting, easing some worries about deflationary pressures and perhaps buying the Federal Reserve some time on more monetary easing. The core figure rose 0.2%, as expected, after increasing by the same amount previously.
And a preliminary read of Thomson Reuters/University of Michigan's July consumer sentiment index came in at 72, its lowest level since December 2011, CNBC reported. Economists had expected a reading of 73.4, according to a Reuters poll, versus 73.2 in the final June report.
Wells Fargo (WFC) reported second-quarter earnings of 82 cents a share and a decline in revenue of 1.3% from the prior quarter to $21.3 billion. On average, analysts had expected earnings of 81 cents a share on revenue of $21.35 billion.
Lexmark (LXK) lowered its second-quarter outlook on Thursday, citing a "weaker than expected demand environment, particularly in Europe, and a larger than expected impact from unfavorable changes in currency exchange rates." The company now sees earnings excluding items of 87 to 89 cents a share for the June-ended period, below a previous guidance for a profit of 95 cents to $1.05 a share.
Bedford, Mass., data delivery technology company Acme Packet (APKT) said its board has approved the buyback of up to $200 million worth of its common stock over the next year.
New York & Co. (NWY) expects its second-quarter results to exceed previous expectations. The company now sees an operating loss of $5 million to $7 million for the quarter vs. a loss of $15.1 million in the same period a year earlier.
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It's time that the USA stop this hand holding supporting other countries with millions of US dollars and military support, yet there are americans here without jobs, losing their homes and relying on government help and being denied. Americans are using their life savings and raiding their retirement accounts just to survive. Is this what we have become and are about? Let's start at home and fix our problems first. We are like the plumber who has a leaky faucet and the carpenter who's house isn't finished. We need get the USA repaired and back in good shape.
But.... work at a financial institution..... still MILLIONS, maybe even BILLIONS..... and you might be in line for a reprimand. Look no further for why the globe is in a crisis. And until we are willing to honestly address and deal with it, we are not going to be "recovering" anything, anywhere, anytime soon....
"JPMorgan said today that it recently discovered information that suggests some individuals at the company may have been trying to avoid showing the full amount of the losses. All employees working on synthetic credit derivatives in the CIO have left the bank, the company said today."
>>>Still can't believe America gave its economy away to the Chinese. World War III without a shot fired.<<<
boy THAT's a true statement!!!!!!!
no no no .......see, that's because there's no law against being a bad businessman!
>>>>But.... work at a financial institution..... still MILLIONS, maybe even BILLIONS..... and you might be in line for a reprimand. Look no further for why the globe is in a crisis. And until we are willing to honestly address and deal with it, we are not going to be "recovering" anything, anywhere, anytime soon....<<<<<<
Can we trust the Chinese government numbers? We don't even trust our BLS crap... China has to say their GDP is within the realm of expectations -- the leadership there is scared of populace unrest.
We can not even make our Olympic Athletes uniforms in the USA. ALL their uniforms were all made in China ! Can you believe that..? Where are our Factories? Where is our pride anymore? I voting for Mitt only because I vowed never to keep anyone as president if they did not fix what he was elected to do regardless of what PARTY they belonged too.....and Obumer did not fix a lot of things...So he is Out of Here...!!! And if Mitt F's it up....... He's out of there in 2016 too...!!! And whom ever comes next and that goe's for all of Congress....!!!!
"[Mitt Romney's] father, George Romney, set the precedent that people running for president would file their tax returns, let everybody look at them. But Mitt Romney can't do that because he's basically paid no taxes in the prior 12 years." --Harry Reid
Memo to Harry: Romney paid $3 million in taxes in both 2010 and 2011, the only years he has released information. He donated even more than that to charity. Is that "basically no taxes"?
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[BRIEFING.COM] Quiet action continues with the S&P 500 once again probing fresh intraday highs. Nine sectors saw corresponding upticks as the benchmark average neared its current levels. The only exception was the utilities sector, which remains near its lows.
The utilities sector has been the subject of some selling in recent weeks. The high-yielding space is down 3.6% this week, and lower by 6.7% so far this month. Nasdaq -12.23 at 3447.19... NYSE Adv/Dec 824/2056... Nasdaq ... More
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