JPMorgan Chase's offices in San Francisco
JPMorgan Chase & Co. shares sank in the post market in heavy volume after the bank said it expects to lose $800-million (U.S.) this quarter on complex investments made by its own traders.
Its shares are down about 6 per cent in extended trading and other bank stocks are suffering heavy losses as well. Citigroup shares are down 3.4 per cent and Bank of America stock is down 2.6 per cent. The news quickly led to renewed calls in Washington for a heavier-handed approach by regulators to monitoring banks' trading activity, and traders were left to speculate whether other bank portfolios face similar risks.
The news also dragged down S&P 500 futures, pointing to a tough trading day ahead on Friday. S&P 500 futures were last down 9.2 points; Nasdaq 100 futures fell 14.75 points.
The loss occurred in JPMorgan's corporate and private equity segment. JPMorgan previously had planned on a profit for the segment of $200-million excluding some special items.
Elsewhere in the post market, Nordstrom Inc. shares fell 5 per cent as the upscale retailer's quarterly earnings fell short of Street expectations. Fiscal first-quarter profit of 70 cents were a nickel less than Street forecasts.
Chesapeake Energy Corp. shares fell a further 1 per cent on top of the regular session's 1.7 per cent loss after the Wall Street Journal reported the struggling natural gas producer saddled itself with about $1.4-billion of previously unreported liabilities over the next decade through off-balance-sheet financial deals. Most of the liability reportedly comes this year and next, when Chesapeake is scrambling to raise cash to cover its operating costs.
Pharmacy benefits manager Express Scripts said its first-quarter profit fell 18 per cent to 55 cents per share. Excluding one-time items, it earned 73 cents per share. Revenue climbed 9 percent to $12.13-billion. Analysts forecast earnings of 77 cents per share on $11.47-billion in revenue. Shares were down 1 per cent in the post market
In Canada, investment firm Gluskin Sheff and Associates Inc. reported lower first-quarter profits compared with a year ago as the company managed less money. The company earned $5-million (Canadian), or 17 cents per diluted share, in its latest quarter, down from $7.2-million, or 24 cents, per diluted share a year ago. Revenue fell to $19.5-million from $22.8 million as both management and performance fees dropped.
Friday Lookahead
In addition to the fallout from the JPMorgan news, markets will be monitoring the release of the Reuters/University of Michigan's consumer sentiment index for May. It rose slightly to 76.4 in April and the consensus expectation is that it will dip slightly to 76.2.
Statistics Canada releases the jobs report for April. Economists expect the unemployment rate to remain unchanged at 7.2 per cent, and job creation of 10,000 new positions. The report is unlikely to have much impact on equity trading but will have ramifications on credit and currency markets.
Darcy Keith