While you were sleeping: JPMorgan, Google profits, US jobless

Friday 17th April 2009

JPMorgan Chase & Co. posted a smaller-than-expected decline in first-quarter earnings and said it wants to repay some US$25 billion in US federal aid from the Troubled Asset Relief Program.

The second-biggest US bank posted a 10% drop in profit last quarter to US$2.14 billion, helped by trading in fixed-interest securities. At the same time, bad loan provisions climbed and chief executive Jamie Dimon said the world's biggest economy is likely to continue to deteriorate, with further defaults on home loans.

The lender raised US$3 billion by selling 6.3% notes maturing in April 2019, its first dollar-denominated debt sale without US government backing since August.

Shares of JPMorgan climbed 2.1% to US$33.24, bringing their advance in the past month to 29%. Citigroup rose 1% to US$4.01.

Google Inc. posted a better-than-expected 8.9% gain in first-quarter earnings to US$1.42 billion after cutting costs and exiting less profitable businesses. The shares rose 2.4% to US$388.74 in ordinary trading.

Hewlett-Packard rose 5% to US$36.60, leading a rally in tech stocks after displacing rival Dell Inc. as the biggest PC company in the US HP had 27.7% of US personal computer sales in the first quarter, versus a 26.2% share for Dell, according to research firm Gartner Inc. Microsoft rose 4.9% to US$19.76.

The Nasdaq Composite rose 2.7% to 1670.44. The Dow Jones Industrial Average climbed 1.2% to 8125.43 and the Standard & Poor's 500 Index advanced 1.6% to 865.30.

General Motors rose 2% to US$1.93 after Bloomberg reported the automaker will approach bondholders with an offer to exchange their US$27.5 billion of debt securities with equity

Initial US unemployment claims unexpectedly fell last week, stoking optimism the US recession may be abating, a phenomena already mooted by President Barack Obama and Federal Reserve Chairman Ben Bernanke.

Jobless claims fell by 53,000 to 610,000 last week, according to the Labor Department. Other figures showed the housing slump may be petering out. The number of housing starts was unchanged at 358,000 last month.

Adding to the optimism, the Fed Bank of Philadelphia's economic index improved to -24.4 this month from -35 in March.

US Treasuries fell after the economic reports. The yield on 10-year government debt rose 6 basis points to 2.83%.

Crude oil rose on speculation the US recession is running out of downward momentum. Crude oil for May delivery rose 1.5% to US$49.98 a barrel on the New York Mercantile Exchange.

Gold futures for June delivery fell 1.5% to US$879.80 an ounce in New York.

Copper declined, extending its slide after Chinese data showed growth in the economy of the world's biggest consumer of the metal slowed to a 10-year low of 6.1% in the first quarter from a year earlier.

Copper futures for July delivery fell 1.4% to US$2.179 a pound on the New York Mercantile Exchange.

The euro weakened against the yen and US dollar on concern the 16-nation region won't quickly pull itself out of recession.

The euro fell to 130.93 yen from 131.44 and fell to $1.3183 yesterday, after dropping to 129.37, the lowest level since March 31. It declined to $1.3179. The yen traded at 99.26 per dollar from 99.37.

Europe's industrial production slumped by the most on record in February, shrinking 18.4% from a year earlier on waning demand for the region's products, according to the European Union's statistics office.

The Dow Jones Stoxx 600 Index rose 1.7% to 193.82. Nokia Oyj jumped 9% after reiterating its profit forecast and saying it sees signs of stabilization in the handset market.

Deutsche Bank climbed 6.1%, leading Germany's DAX 30 up 1.3% to 4609.46, as JPMorgan's profit stoked optimism for banks. France's CAC 40 rose 1.8% to 3038.18, led by a 16% gain for Dexia. Financials led the FTSE 100 higher in London. The benchmark index climbed 2.1% to 4052.98 as Prudential rose 8.6%, Barclays advanced 7.7% and Lloyds Banking Group rose 6.7%.

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