JPMorgan Loss Likely to Drag on Dow
LONDON -- After breaking a six-day losing streak by closing up 20 points yesterday, early futures trading suggests the Dow Jones Industrial Average (INDEX: ^DJI) will open lower this morning.
Today the headline economic news will be the Producer Price Index, which is expected to show a 0.1% fall from last month. News of slowing growth in China may also dampen investors' appetite for risk; figures released overnight showed that year-on-year growth fell from 11.9% in March to 9.3% in April.
However, financial stocks could be the largest casualties on the market in early trading, following news late yesterday that JPMorgan Chase (NYS: JPM) , the largest U.S. bank by assets, has suffered a $2 billion trading loss due to a failed hedging strategy.
In this morning's European trading, JPMorgan shares were down by more than 6%. Pre-market trading figures suggest a similar fall in the bank's U.S. stock is likely when the markets open, with Bank of America also attracting negative sentiment.
Over in Europe, the Spanish market lost little time in starting to reverse yesterday's gains as speculation over the country's economic problems continued and anticipation mounted about an announcement due later today about the Spanish government's plans for the banking sector.
Two of Europe's biggest blue chips, Telefonica SA (NYS: TEF) and Credit Agricole, both posted poor earnings, with profits down 54% and 75%, respectively. This contributed to a wider fall in the European benchmark STOXX 50 index, which was down about 0.5% by late morning.
The FTSE 100 (INDEX: ^FTSE) also fell sharply on opening, with miners and bank shares the biggest losers, following the news from China and JPMorgan. However, oil giant Royal Dutch Shell (NYS: RDS.B) bucked the trend, rising 0.5% on news that Qatar's sovereign wealth fund is in "very advanced talks" to buy a substantial stake in the company.
Other major companies that could see strong trading today include Avon, following news that perfume-maker Coty had increased its offer for the company to $24.75 per share -- a 6.5% increase that appears to have new backing from Berkshire Hathaway.
While Berkshire Hathaway rarely invests outside the U.S., one U.K. blue chip has recently persuaded CEO Warren Buffett to invest more than $1 billion. The legendary investor recently bought a famous British name with global expansion potential -- and you can discover the identity of the company and the price he paid in this special free report.
Are you looking to profit from this uncertain economy? "10 Steps To Making A Million In The Market" is The Motley Fool's latest report. We urge you to read it today -- your wealth could be transformed. Click here now to request your free, no-obligation copy. The Motley Fool is helping Britain invest. Better.
Further investment opportunities:
At the time thisarticle was published Roland Head owns shares in Royal Dutch Shell but no other shares mentioned in this article. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.The Motley Fool owns shares of JPMorgan Chase. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
