May 11 - JPMorgan Chase's $2 billion loss doesn't sit well with investors, pushing the stock down through midday, as investors once again question the risks being taken at America's biggest banks. Jill Bennett reports.
Wall Street responds to JPMorgan's shock trading loss, of at least 2 billion dollars from a failed hedging strategy, with selling. The stock tumbles 9 percent at the opening bell Friday as investors worry about how big the losses could get and remained under pressure at midday. Bank analyst Dick Bove is lowering year-end targets on the stock. SOUNDBITE: RICHARD BOVE, BANK ANALYST, ROCHDALE SECURITIES (ENGLISH) SAYING: "I think a minimum of 12 to 18 months are going to be required to bring this business back to where it was and that's why I didn't just reduce the estimates for this year I reduced them for 12/13 and 12/14 because this trading business has been hurt it's been hurt badly." The trading loss is a black eye for the bank, which was pretty much the only major U.S. Wall Street institution to come out of the recent financial crisis unscathed. Agnes Crane, Reuters Breakingviews columnist: SOUNDBITE: AGNES CRANE, COLUMNIST, REUTERS BREAKINGVIEWS (ENGLISH) SAYING: "JPMorgan has a great reputation but I think it's like you are never good enough to run a big bank and I think that's what is coming out from this, no matter how good you are there's going to be an aspect you may not be monitoring, again this is an office that's like right next to Jamie Dimon it's not like it's out on the fringe so I think it really kind of brings in that issue of trust and I think investors are going to start looking at other banks as well. I think this is going to reverberate beyond JPMorgan." The domino effect is already in play on the trading floor. Shares of Morgan Stanley, Goldman Sachs, and Citigroup all fell on the news. But Wells Fargo wiped away its early loss in a sign investors are trying not to paint the sector with a broad brush. This is the latest hurdle for financial stocks which have been among the most volatile stocks in recent months amid concerns over the sovereign debt crisis in Europe and the global economy. Yet JPMorgan CEO Jamie Dimon, in a conference call Thursday, said the actions of his bank do not reflect the actions of others. SOUNDBITE: VOICE OF JAMIE DIMON, CEO, JPMORGAN CHASE (ENGLISH) SAYING: "Just 'cuz we're stupid doesn't mean everybody else was. I have no idea what other people are doing." Still, the S&P Financial Sector is expected to extend its losses of almost 3% so far this month, as investors try to figure out if there are other banks still taking risky bets. Jill Bennett, Reuters