Post date: May 10, 2012 11:11:49 PM
Summary of business headlines: JPMorgan Chase takes a hit in trading book; Wall Street ends mostly higher helped by economic data.
USA-USCLOSE - After the close, a startling revelation from JPMorgan Chase. The bank says it has had an unexpected market loss in a trading book after a hedging strategy failed. The $800 million loss could "easily get worse" in the quarter. That's what CEO Jamie Dimon said in a conference call where he described the
incident as "egregious mistakes" and a problem "self-inflicted." His revelation could revive worries about Wall Street risk taking, putting pressure on bank stocks when trading resumes on Friday.
As for Thursday, Blue chips finished higher for the first time in seven sessions as economic fears receded a bit, but some strategists say the market was due for a bounce.
A little optimism crept back into the market after weekly jobless claims dropped last week, soothing concerns about the labor market; meanwhile a rise in the U.S. trade deficit showed steady demand for goods produced in and outside of the U.S. border. And Federal Reserve Chairman Ben Bernanke added a dash of hope.
U.S. FEDERAL RESERVE CHAIRMAN BEN BERNANKE, SAYING:
"Conditions in the banking system and the financial system more broadly have improved significantly in the past few years. Banks have strengthened their capital and their liquidity positions. The economic recovery has facilitated the rebuilding of capital, and helped improve the quality of the loans and other assets on banks' balance sheets."
The Fed chief went on to say improving credit conditions will mean more lending, which will help strengthen the overall economic recovery.
Cisco was a big loser. The stock down more than 10 percent one-day after issuing disappointing guidance.
That weakness may have put a cap on gains for the Nasdaq amid a tepid rally on Wall Street.
In Europe, an intermission in Greece's political drama gave stocks room to make small advances.
Conway Gittens, Reuters