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Stocks slide as JPMorgan's revenue falls short; consumer sentiment fans concerns about economy
By TIM PARADIS and IEVA M. AUGSTUMS
AP Business Writers
(AP) 04:29:38 PM (ET), Friday, January 15, 2010 (NEW YORK)
The Dow Jones industrial average had its first triple-digit drop of 2010 as mounting losses from loans at JPMorgan Chase & Co. and a disappointing consumer sentiment reading sent investors rushing from stocks.

Financial stocks led the market lower Friday, pulling major stock indexes down about 1 percent from 15-month highs. The Dow lost almost 101 points, its steepest drop since Dec. 31. Interest rates fell in the bond markets as investors bought Treasurys in search of safety.

JPMorgan, regarded as one of the strongest U.S. banks, warned investors it was too soon to say that losses on mortgages and other loans have peaked. The weakness in JPMorgan's consumer business hurt other financial stocks, which led the rest of the market lower.

Investors took little solace from a much stronger than expected profit report late Thursday from Intel Corp., the biggest maker of computer chips.

Commodity prices slumped as the dollar turned higher, and a disappointing report on consumer sentiment also weighed on the market. The preliminary Reuters/University of Michigan consumer sentiment index for January rose to 72.8 from 72.5 in late December but came in weaker than economists had forecast.

The news from JPMorgan brought concerns about profits at other big banks, many of which post results next week. Banks have been saying since the financial crisis exploded in the fall of 2008 that mortgages resetting at higher rates and job losses would push more loans into default. The latest comments gave investors a fresh reminder that the economy still needs more time to heal.

After a 10-month run in the market that has been all but unbroken, some investors think stocks are running low on gas. Light trading volume since November indicates there is little conviction behind the market's recent ascent. The Dow on Thursday closed above 10,700 for the first time since October 2008 and has climbed 62.1 percent since March, though it's still down 25.1 percent from its peak in October 2007.

The market will get additional signals about the economy next week as many more companies report earnings. U.S. markets are closed on Monday for Martin Luther King Jr. Day.

Adam Gould, senior portfolio manager at Direxion Funds in New York, said the reaction to JPMorgan's report signaled that investors had gotten too far ahead of themselves in predicting stellar earnings from companies.

"The market has been pricing in the best-case scenario for earnings for all of these companies," he said. "I think with an earnings report like this six months ago, we would've seen stocks rally."

According to preliminary calculations, the Dow fell 100.90, or 0.9 percent, to 10,609.65, the biggest drop since it lost 120 points on the final day of 2009. The broader Standard & Poor's 500 index fell 12.43, or 1.1 percent, to 1,136.03, and the Nasdaq composite index fell 28.75, or 1.2 percent, to 2,287.99.

Bond prices rose, pushing their yields lower. The yield on the benchmark 10-year Treasury note fell to 3.68 percent from 3.74 percent late Thursday.


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* JP Morgan is really taken a hit these days.
Hope this type of financial virus doesn't spread. *

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