The share gains may not last, according to Paul Miller, a former examiner for the Philadelphia Federal Reserve Bank and an analyst at FBR Capital Markets Corp. in Arlington, Virginia.
“Over time, it will still drift down,” Miller said in an interview. “There’s a lot of unanswered questions with this CIO.”
Dimon is also grappling with historically low interest rates that have compressed profit margins on lending as well as yields on investments. Moshe Orenbuch, of Credit Suisse Group AG, was among analysts who lowered earnings projections for banks amid weak trading revenue and market turmoil caused by Europe’s sovereign-debt crisis.
Manipulated markets: On a day when a $7 billion loss was announced, JP Morgan Chase stock went up almost 6% and the DOW goes up over 200 points. WTF? Are people really this blind
JPMorgan Chase disclosed on Friday that losses on its botched credit bet could climb to more than $7 billion and that the bank’s traders may have intentionally tried to obscure the full extent of the red ink on the disastrous trades.
Mounting concerns about valuing the trades led the company to announce that its earnings for the first quarter were no longer reliable and would be restated. Federal regulators, who were already examining the trades, are now looking at whether employees of the nation’s biggest bank by assets intended to defraud investors, according to people with knowledge of the matter.
The revelations left Jamie Dimon, the bank’s chief executive, scrambling for the second time within two months to contain the fallout from the trading debacle. It has already claimed one of his most trusted lieutenants, compelled Mr. Dimon to appear before Congress to account for the blunder and prompted the bank to claw back millions in compensation from three traders in London at the heart of the losses. A top bank official said that the board could also seize pay from Mr. Dimon, but did not indicate that it would do so.
NEW YORK (MarketWatch) — U.S. stocks rose sharply Friday, lifting the Dow industrials and S&P 500 into positive terrain for the week, as bank shares rallied after J.P. Morgan Chase & Co.’s second-quarter results.
“They are the single best bank, not only domestically but globally,” said Chip Cobb, portfolio manager at BMT Asset Management in Bryn Mawr, Penn., referring to J.P. Morgan.
The Dow Jones Industrial AverageDJIA +1.62% rose 203.82 points, or 1.6%, to 12,777.09. The index is up 0.04% from last Friday’s close.
All but one of the Dow’s 30 components rose, led by J.P. Morgan ChaseJPM +5.96% , up 6% after the nation’s largest bank reported a $5 billion profit in the second quarter, which included a $4.4 billion trading loss on synthetic credit derivatives. Read more here .