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BUSINESSFriday 15 January 2016

Led by energy sector;                                                                              JPMorgan Chase Co’s earnings
                                                                                                   rise 9 percent, beat estimates 
US stocks rebound a day after plunge
                                                                                                   KEN SWEET
ALEX VEIGA                        added 88.94 points, or 2        in New York. Brent crude, a      AP Business Writer
AP Business Writer                percent, to 4,615.              benchmark for internation-       NEW YORK (AP) — Banking giant JPMorgan Chase &
Energy stocks led a broad         It was the best gain for        al oils, also gained 72 cents,   Co. said Thursday that its fourth-quarter profits rose 9
rally in U.S. stocks Thursday,    each index since Dec. 4.        or 2.4 percent, to $31.03 a      percent from a year earlier, helped by strong perfor-
giving the market its big-        Even with the big rebound       barrel in London.                mance in its consumer banking division and lower legal
gest gain in over a month.        day the three major U.S.        The rise in crude oil led trad-  expenses.
A recovery in crude oil pric-     stock indexes remain down       ers to pile into several big-    The largest U.S. bank by assets said it earned $4.91 bil-
es helped put stocks into         for the year. The Dow and       name energy companies.           lion, or $1.32 per share, after payments to preferred
rebound mode a day af-            S&P 500 are both off about      Exxon Mobil added $3.47,         shareholders, compared to a profit of $4.49 billion, or a
ter the market had its worst      6 percent, while the Nas-       or 4.6 percent, to $79.12,       $1.19 per share, a year earlier. The results topped ana-
                                                                                                   lysts’ forecasts, who were looking for JPMorgan to earn
Shake Shack CEO Randy Garutti, center, joined by company CFO Jeff Utz, left, and founder Danny     $1.26 per share, according to FactSet.
                                                                                                   JPMorgan’s latest results reflected similar themes CEO
Meyer, celebrate during opening bell ceremonies at the New York Stock Exchange, Thursday,          Jamie Dimon and the bank’s management have been
                                                                                                   pushing for several quarters. The bank remained fo-
Jan. 14, 2016. 					                                              (AP Photo/Richard Drew)          cused on cutting expenses, including through layoffs or
                                                                                                   other headcount reductions, preparing itself for bigger
drop since September.             daq is down nearly 8 per-       while Chevron rose $4.14,        profits once interest rates rise further, as many expect
Investors also welcomed           cent.                           or 5.1 percent, to $85.47.       will happen this year. The bank’s total employees fell 3
some encouraging com-             It’s been a rocky start to      “The markets in general          percent year-over-year to 234,598 workers.
pany earnings.                    the year for stocks, reflect-   needed a little dose of          The bank was also impacted by a steep drop in pric-
Chevron and Exxon Mo-             ing investor worries about      confidence and they got it       es for oil and other commodities. JPMorgan had to
bil each jumped about 5           the slowdown in China,          through a firming of oil pric-   modestly add to its credit reserves to cover loans to oil
percent, by far the biggest       plunging oil prices and the     es,” Lynch said.                 and gas companies, who have been struggling as oil
gains in the Dow Jones in-        implications those trends       Energy company Williams          plunged near $30 a barrel, as well loans to metal and
dustrial average. It was          may have for U.S. corpora-      Cos. vaulted 34.4 percent,       mining companies.
a reprieve for the energy         tions. The first eight trading  to lead all the gainers in the   Dimon stressed that the deterioration in oil and com-
sector, which has been            days of 2016 represent the      S&P 500. The stock, which        modities should be treated as a sign of caution, but not
battered in recent months         worst start to a year in the    had fallen sharply a day         of extreme worry.
as crude oil prices plunged.      history of both the S&P 500     earlier, rose $4.68 to $18.29.   “So obviously (the U.S. economy) going to get a little
U.S. crude oil rose 2.4 per-      and the Dow.                    It’s still down 29 percent for   bit worse. We’re not forecasting a recession. We think
cent on Thursday.                 That slump worsened on          the year. Freeport-McMo-         that the U.S. economy looks pretty good at this point,”
“That all led to a little bit of  Wednesday, pushing the          Ran also got a boost. The        Dimon said, in a call with investors.
confidence in the markets         S&P 500 index into what’s       mining company rose 46           Marianne Lake, JPMorgan’s chief financial officer, said
and some buyers com-              known as a correction, or a     cents, or 12.3 percent, to       the bank is likely to set aside more money to cover oil
ing in,” said Sean Lynch,         drop of 10 percent or more      $4.20.                           and gas loans, if oil prices continue to struggle. The
co-head of global equity          from a peak.                    All told, the S&P 500’s en-      amount is small, possibly $500 million to $750 million,
for Wells Fargo Investment        On Thursday, after waver-       ergy stocks jumped 4.5 per-      Lake said in a conference call with reporters.
Institute. “It’s been pretty      ing in the first hour of trad-  cent. The sector remains         JPMorgan’s consumer bank, the firm’s largest division
ugly so far, year-to-date,        ing, the market shifted         down 6.1 percent for the         by profit and revenue, reported strong results. Chase
and it’s good to see the          higher and remained on          year.                            earned $2.41 billion, up 10 percent from a year earlier.
gains, but we’ll see if they      an upward track the rest of     The start of the latest cor-     The bank grew both deposits and loans in the quarter.
follow through (Friday.)”         the day.                        porate earnings season           Notably, auto lending was up 33 percent from a year
The Dow rose 227.64 points,       Investors welcomed a pick-      also helped lift the market      earlier. Credit cards also did well, as customers spent
or 1.4 percent, to 16,379.05.     up in the price of crude        Thursday.                        more on JPMorgan’s credit and debit cards and lower
The average had risen as          oil, which had briefly fallen   JPMorgan Chase rose 1.5          delinquencies and charge-offs
much as 330 points earlier.       below $30 a barrel for the      percent after the bank re-       The corporate and investment banking division also re-
The Standard & Poor’s 500         first time since late 2003 the  ported earnings that were        ported a jump in profits, but it was largely tied to lower
index gained 31.56 points,        day before. It ended up ris-    better than analysts ex-         expenses. The volatile stock and bond markets in the
or 1.7 percent, to 1,921.84.      ing 72 cents, or 2.4 percent,   pected. The stock added          last part of the year made trading more difficult, and
The Nasdaq composite              to close at $31.20 a barrel     86 cents to $58.20. q            JPMorgan reported a slight drop in both its equity and
                                                                                                   fixed income revenues from a year ago. The division
                                                                                                   earned $1.75 billion in the quarter compared with $776
                                                                                                   million a year earlier.
                                                                                                   JPMorgan cut expenses two ways in its investment
                                                                                                   bank. Legal expenses dropped to $644 million com-
                                                                                                   pared with $1.1 billion a year earlier and the bank’s
                                                                                                   employee compensation expenses fell from $2.02 bil-
                                                                                                   lion to $1.86 billion. The lower compensation expenses is
                                                                                                   a sign the bank set aside less for year-end bonuses this
                                                                                                   year, likely a reflection of last year’s difficult markets.
                                                                                                   JPMorgan’s commercial bank, where a significant por-
                                                                                                   tion of JPMorgan’s oil and gas lending business sits, was
                                                                                                   on big drag on the bank’s results this quarter. The divi-
                                                                                                   sion had profits of $550 million in the quarter, down from
                                                                                                   $693 million in the quarter a year earlier. The money the
                                                                                                   bank had to set aside for struggling oil and gas loans
                                                                                                   was largely the cause for the drop, as commercial
                                                                                                   banking revenue was relatively flat in the quarter.q
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