Markets sell off after JPMorgan earnings

Dow dropped 103, decliners over advancers 3-1 & NAZ was off 23. Dow was hurt by JPM's report & NAZ by INTC's report last night. Banks are losing the steam they have had recently, the Financial Index may be heading back down to test 190 support.


S&P 500 FINANCIALS INDEX

Value 201.72

Change -3.82

% Change -1.9%

The Alerian MLP Index has been trading sideways this year (after the initial bump up on day 1). Today it's off 1+ to the 291s. The Dow Jones REIT Index is off 1, also trading sideways this year. Junk bonds funds were weak. Treasuries were in demand on a stronger dollar. The yield on the 10-year Treasury bond fell 6 basis points to 3.67%.


Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks









Oil & gold slipped on a stronger dollar & going into a long weekend.

CLG10.NYM

...Crude Oil Feb 10

...78.48

... 0.91 .......(1.2%)

GCF10.CMX

...Gold Jan 10

...1,128.60

... 14.00 .......(1.2%)

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Jamie Dimon, CEO






Photo: Bloomberg



JPMorgan (JPM), Dow stock, reported Q4 profits soared to $3.3B, topping expectations. However, analysts were hoping for signs that credit costs were leveling off or even starting to fall. CEO Jamie Dimon said, "We don't know when the recovery is to begin." Asked about the outlook for the economy, Dimon said, "There are some good signs out there, but we don't know." Q4 profits rose to 74¢ per share, beating estimates of 61¢. But revenue totaled $25B, falling short of $26B forecasted. The bank's large mortgage & credit card businesses have seen rising credit costs in the last year, offset only by record investment banking revenue. JPM set aside $4.2B to cover mortgage losses in Q4, up $653M from Q4 last year. Loan loss reserves in its commercial banking unit increased to $494M from $190M. JPM shares fell 61¢ to $44.08. JPMorgan is considered the best capitalized & best managed bank. These results do not bode well for competitors.

•JPMorgan Earnings More Than Quadruple on Fees as Retail Bank Reports Loss


JP Morgan --- 1 year





Intel (INTC), Dow stock, last night reported revenue rose 28% to $10.6B in Q4 & the company earned the largest gross profit margin in its history. Net income was 40¢ a share, up sharply from 4¢ last earned year. INTC sold $1.4B of Atom chips (the new chip powering netbooks books like this one) over the last year helping profits. But the stock dropped 43¢ to $21.05.

•Intel's Bet on Innovation Pays Off in Faster Chips
at The New York Times


Intel --- 1 year

JPM earnings can only be describe as disappointing. It indicates more gloomy reports are coming from banks & another reminder that the economic recovery is not going well especially with consumers.

Dow Jones Industrials --- 2 weeks