While you were sleeping: JPMorgan, Nokia earnings, US homebuilders

Friday 17th July 2009

JPMorgan Chase & Co, the second-largest bank in the US, posted a 36% gain in second-quarter earnings as fees from investment banking surged, making up for more defaults on consumer loans.

Second-quarter profit rose to a higher-than-expected US$2.7 billion, from $2 billion a year earlier, the lender said in a statement. Total revenue rose to a record US$27.7 billion. It doubled the amount set aside for bad loans to US$9.7 billion and forecast ongoing losses from credit cards.

"We're still obviously in a pretty big recession," chief executive Jamie Dimon told analysts and reporters.

JPMorgan’s shares fell 0.4% to US$36.13, while the Dow Jones Industrial Average advanced.

Nokia Oyj, the world’s biggest maker of cell phones, cut its forecasts for earnings and market share after posting a slump in second-quarter earnings. Nokia's second quarter underlying earnings per share shrank to 0.15 euros from 0.37 euros. Sales dropped 25% to 9.9 billion euros.

Its shares tumbled 13%. Market share would be little changed this year, as rivals cut prices aggressively to maintain sales. Sony Ericsson posted a loss for the second quarter.

US homebuilders’ confidence rose to the highest level since September, according to the National Association of Home Builders/Wells Fargo index of builder confidence. The index jumped to 17 in July from 15 last month. A reading below 50 means most respondents view conditions as poor.

The Philadelphia Federal Reserve said its index of factory conditions in the US Mid-Atlantic region worsened to minus 7.5 in July from minus 2.2 in June. Readings below zero signal contraction.

The US Labor Department said initial claims for state unemployment insurance fell 47,000 to a seasonally adjusted 522,000 last week.

The Labor Department said there were fewer seasonal layoffs than anticipated in early July among automakers and other manufacturers.

The rate of home foreclosures rose in the first half of the year. Filings gained to a record 1.9 million in the first half of 2009, RealtyTrac reported.

Treasury Secretary Timothy Geithner said there are “durable” signs that financial markets are on the mend, according to Bloomberg. Still, it is too soon for the U.S. to withdraw its stimulus measures, he told Bloomberg Television.

The yen traded at 132.69 per euro from 132.95 while the greenback weakened to $1.4142 per euro from $1.4107. The yen strengthened to 93.8 per dollar from 94.23.

Lender CIT Group, which may be lurching toward bankruptcy, saw its bonds plunge and shares tumble after saying it ended talks on seeking a government bailout.

Fitch Ratings cut CIT to C from BB-, saying it expects the lender to file for bankruptcy soon.

CIT’s 5% notes due in 2014 fell to about 52 cents on the dollar on Thursday from 61.5 cents late on Wednesday, according to Bloomberg. CIT’s shares slumped 75% to US$0.41.

US stocks advanced for a fourth day as some investors speculated the worst of the economic slump may be over.

The Dow Jones Industrial Average rose 1.1% to 8711.82 and the Standard & Poor’s 500 climbed 0.9% to 940.74. The Nasdaq Composite rose 1.2% to 1885.03.

Mosaic Co., a fertilizer producer, surged 12% to US$49.98 after a report that Vale SA may bid $25 billion for the company.

Bank of America, which reports its earnings on Friday in the U.S., fell 1.9% to US$13.17, leading the Dow lower.

Shares in Europe gained, with the Dow Jones Stoxx 600 climbing 0.4% to 209.86, the highest since June 12.

BNP Paribas rose 1.7% and Societe Generale gained 3.2%, leading gains in financials after JPMorgan’s results.

The UK’s FTSE 100 rose 0.4% to 4361.84, Germany’s DAX 30 gained 0.6% to 4957.19 and France’s CAC 40 gained 0.9% to 3199.68.

Electrolux, the world’s second-largest appliance maker, jumped 9.2% after reporting second-quarter net income rose to 658 million kronor from 99 million kronor a year earlier. Chipmaker Infineon gained 12% after reporting an increase in sales.

Crude oil rose to its highest level in a week as shares advanced, stoking optimism demand for fuel will grow.

Crude oil for August delivery gained 0.8% to US$62.05 a barrel on the New York Mercantile Exchange.

Copper futures for September fell 0.25 cent to US$2.3895 a pound in New York. Gold futures for August delivery fell 0.4% to US$935.40 an ounce.

Businesswire.co.nz

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