May 11, 2012 / 1:02 PM / 6 years ago

US STOCKS-Futures point to decline after JPMorgan loss

* Bank shares tumble after JPMorgan reveals loss
    * Sector was already down on Europe, growth fears
    * Nvidia rallies in premarket after results
    * Investors look to consumer sentiment data
    * Futures down: Dow 71 pts, S&P 10.9 pts, Nasdaq 15.25 pts

    By Ryan Vlastelica	
    NEW YORK, May 11 (Reuters) - U.S. stock index futures
pointed to a lower open on Friday after JPMorgan Chase & Co
revealed a trading loss of at least $2 billion from a failed
hedging strategy that weighed on bank shares.	
    The news sent shares of the Dow component down 8 percent to
$37.47 in premarket trading, and is the latest hurdle for a
sector already besieged by the sovereign debt crisis in Europe
and fears of slowing growth globally.	
    While other gains partially offset the trading loss,
JPMorgan Chase estimates the business unit with the
portfolio will lose $800 million in the current quarter,
excluding private equity results and litigation expenses. The
bank had previously expected the unit to earn a profit of about
$200 million.	
    Jamie Dimon, the chief executive of the biggest U.S. bank by
assets, cautioned that losses could grow by another $1 billion.
    "While this is an isolated incident that has nothing to do
with how the economy will recover, it is very painful to hear,"
said Tim Speiss, head of personal wealth advisors at EisnerAmper
in New York. "Investors need to look at what this might do to
JPMorgan's equity value, and whether it is something that could
trouble the whole sector."	
    Bank of America Corp fell 2.2 percent to $7.53
before the bell while Citigroup Inc lost 3.5 percent to
$29.59 and the Financial Select Sector SPDR was off 1.9
percent to $14.70. The S&P financial sector will likely
extend its losses of almost 3 percent so far this month.	
    Financial stocks have been among the most volatile in recent
months as investors question what the growth outlook for the
U.S. and the debt crisis of Europe will mean for the group's
profits. JPMorgan has fallen 11.4 percent since the end of
    The CBOE VIX Volatility Index is up almost 10 percent
this month in a sign of growing caution.	
    S&P 500 futures fell 10.9 points and were below fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures sank 71
points and Nasdaq 100 futures lost 15.25 points.
    For the week, the S&P is down 0.8 percent, the Dow is off
1.4 percent and the Nasdaq is down 0.8 percent. All three are on
track for their second straight week of losses.	
    Producer prices fell 0.2 percent in April, below the
expectation for flat growth. Futures were little impacted by the
    Investors are also looking ahead to the Thomson
Reuters/University of Michigan's preliminary May consumer
sentiment index. Economists in a Reuters survey expect a reading
of 76.2 compared with 76.4 in the final April report. 	
    Software maker CA Inc late Thursday continued its run
of estimate-beating profit, as demand rose at its North American
    Nvidia Corp shares rose 11 percent to $13.75 before
the bell after reporting adjusted first-quarter earnings that
beat expectations.	
    With 449 of the S&P 500 companies reporting results through
Thursday morning, 66.4 percent exceeded estimates, according to
Thomson Reuters data, compared with more than 80 percent at the
start of earnings season.	
    The Dow rose modestly to break a six-day losing streak on
Thursday, though a weak outlook from Cisco Systems Inc 
capped advances. The S&P 500 could not hold enough gains to
close above its April low. Still, the index has rebounded after
falling to a two-month low near 1,340 on Wednesday.
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