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Entries in Trading (146)

Tuesday
Oct302012

Stock Markets to Reopen After Hurricane Sandy Shut Down NYSE

Hemera/Thinkstock(NEW YORK) -- Hurricane Sandy‘s winds and rains subsided Tuesday, and the New York Stock Exchange announced it will open for normal operations on Wednesday.  This was the first time since 1888 that weather shut down stock trading for two days.

NYSE Euronext said trading will resume for all U.S. equities, bonds, options and derivatives markets on — perhaps fittingly — Halloween.

Investors have been grappling with a volatile earnings season as it is, and now are dealing with uncertainty as they wait for reliable estimates of the cost of damage caused by the storm.

“We are pleased to be able to return to normal trading tomorrow.  Our building and systems were not damaged and our people have been working diligently to ensure that we have a smooth opening tomorrow," said Duncan Niederauer, NYSE Euronext CEO, in a statement. "Our thoughts and prayers remain with the families and communities suffering in the wake of this terrible natural disaster."
On Monday evening, news reports — quickly denied by a spokesperson — said the floor of the exchange was flooded with three feet of water.

“It’s one more uncertainty, and loss of life and damage are always tragic, but to an extent, it’s not a big event that will throw us into recession. It’s more disruptive than anything,” said Scott Brown, chief economist with the investment firm Raymond James.

The last time the exchange was closed for two days for weather was March 12 and 13, 1888, due to the famed blizzard of 1888, according to the NYSE website. The New York Stock Exchange was formed when two dozen stock brokers signed the Buttonwood Agreement in 1792.

Hurricane Gloria, on Sept. 27, 1985 was the cause of the last weather-related closing.

The longest the exchange has recently closed was Sept. 11 to 14, 2001, following the attacks on the World Trade Center.

The NYSE says the exchange also closed at the outbreak of World War I, from July 31 to Nov. 27, 1914.

Brown, whose office in St. Petersburg, Fla. was far from the damage caused by Hurricane Sandy, said many investors are feeling anxious about the opening, though “there may be a bit of optimism if the markets are back in business.”

He said he is not concerned about a long term economic effect on the U.S.

“It pales in significance to the fiscal cliff,” he said.

Brown said most financial firms will recover from weather damage but lost electricity and transportation are also concerns for businesses.

“How will people get to work? Are subways going to be operating?” Brown said.

Though many transactions can be conducted online, that’s not much help if brokers’ homes are without power.  Stock watchers said they did not expect a great surge of trading volume in the morning to make up for the lost days.

“Activity may be a bit subdued if people can’t get to work and get around, but for the most part this is postponing activity that will occur later on,” Brown said regarding trading volume.

When asked what financial professionals have been doing for the last two days, Brown said, “Other than sheer boredom, for us it was an opportunity in research to take a step back and look at the broader themes rather than focus on the day to day.”

Copyright 2012 ABC News Radio

Friday
Aug102012

Fears Mount as China Reports Weak Trading Data in July

iStockphoto/Thinkstock(BEIJING) -- Worries are mounting over the strength of the global economy after China, the world’s second largest economy, reported worse than expected trade data on Friday.

In July, China's exports rose by 1 percent from a year earlier, falling short of the 11.3 percent gain made in June.  Analysts had expected to see a growth of about 8 percent.

Imports, meanwhile, faired slight better, climbing by 4.7 percent last month.  But that still was below expectations -- analysts had predicted a 7 percent gain -- and the figures are down from the 6.3 percent growth in June.

The news sent Asian, European and U.S. stocks down on Friday.

Sluggish trade growth is problematic for the Chinese government as it readies to undergo a once-a-decade transition to new leadership. Since June, the country has cut interest rates twice, but it may need more aggressive action to reverse the downturn.

Copyright 2012 ABC News Radio

Friday
Jul132012

JPMorgan Reports $5B Profit, Expands Trading Loss

Peter Foley/Bloomberg via Getty Images(NEW YORK) -- JPMorgan Chase, still reeling from trading losses in its investment unit, reported a second-quarter profit of $5 billion on Friday.

Investors were less interested in the largest U.S. bank’s net income than the total losses from bad hedged bets in their chief investment office. They announced that the loss this quarter from that the trade was $4.4 billion; estimates had the loss in the range anywhere from $2 billion to $9 billion.  The bank has yet to make clear if there is a possibility of incurring more loss.

[CLICK HERE TO SEE JPMORGAN'S EARNINGS REPORT]

In a surprise announcement in a Securities and Exchange Commission filing ahead of the earnings report, JP Morgan revised its first-quarter earnings to show an additional loss because traders in the CIO unit were misrepresenting the extent of the losses.

According to the SEC filing, “… the firm has recently discovered information that raises questions about the integrity of the trader marks and suggests that certain individuals may have been seeking to avoid showing the full amount of the losses in the portfolio during the first quarter.”

Jim Sinegal, director of financial services research at Morningstar, an investment firm, said the most important discovery from the earnings release is whether the loss is in line with what the company has recently described; that is, whether the problem has been contained.

CEO Jamie Dimon was previously criticized for describing the trading loss as a “tempest in a teapot,” before he later acknowledged that the losses were greater than he was told by his management. His chief investment officer, Ina Drew, resigned in May.

“What Jamie Dimon has done well is under promise and over deliver,” Sinegal said.  “Not only has this escaped his eye as a risk manager -- but to the extent that it got out of hand more than once, if it turns out even bigger than that, you have to wonder if he has as much control as everyone believes him to have.”

“A loss of $5 billion or more would surprise me,” Sinegal said. “I think you would have to reassess your opinion of Dimon and all top risk managers.  It is generally well accepted that JPMorgan has done the best job managing risk of the large banks.”

Copyright 2012 ABC News Radio

Thursday
Jun282012

Report: JPMorgan Chase Trading Loss Could Rise to $9 Billion

Peter Foley/Bloomberg via Getty Images(NEW YORK) -- Trading losses at JPMorgan Chase may be much bigger than previously thought.

Citing people familiar with the matter, The New York Times reports the bank's losses may have ballooned to as much as $9 billion.  Previous reports had the estimate at $2 billion and counting.

The sources tell the newspaper "the red ink has been mounting in recent weeks, as the bank has been unwinding its positions."

In May, JPMorgan traced its loss to losing bets on "synthetic credit securities" -- the same kind of instruments that nearly led to a collapse of the financial system in 2008, prompting a nearly $1 trillion government bailout.

The mishandled trade has added to the debate over bank regulations, and whether some "too big to fail firms" are making very risky trades.

Copyright 2012 ABC News Radio

Tuesday
May152012

JPMorgan Execs to Hear from Shareholders Following $2B Loss

STAN HONDA/AFP/Getty Images(TAMPA, Fla.) -- JPMorgan Chase executives are likely to get an earful from shareholders on Tuesday when they convene in Tampa, Fla.

The bank's $2 billion in-house trading operating loss is expected to be a hot topic at the annual shareholders meeting.  JPMorgan's stock price has dropped dramatically since it reported the loss last week.

Despite the huge loss, Aaron Tasker with Yahoo Financial says the firm is still very strong.

"Two billion dollars is a lot of money.  But for JPMorgan, it's 0.1 percent of their assets.  I mean the bank is gigantic, it's huge, it's very strong," he says.

But Tasker adds that recent history makes investors nervous.

"You remember in the summer of 2007 Bear Stearns announced it had some big losses in two of its hedge funds.  And people said ok that's a problem, but nobody thought Bear Stearns was gonna go out of business over that.  So again it's that little nagging voice in the back of your head that says this is probably nothing but it could be something," he says.

Copyright 2012 ABC News Radio

Monday
May142012

JPMorgan Execs Behind $2 Billion Trading Loss Expected to Resign

STAN HONDA/AFP/Getty ImagesUPDATE: Ina Drew, the chief investment officer at JPMorgan Chase, "has made the decision to retire from the firm," the company announced on Monday.

In a statement, JPMorgan said Drew will be succeeded by Matt Zanes, the current co-head of Global Fixed Income in the Investment Bank and head of Capital Markets within the Mortgage Bank.

(NEW YORK) -- In the wake of JPMorgan Chase’s $2.3 billion in-house trading operating loss, at least three people tied to the risky trades are expected to resign.

Ina Drew, chief investment officer at JPMorgan, will be one of the executives leaving, according to the Wall Street Journal.  Drew, 55, is one of the top women on Wall Street and for the past seven years had been the trading division head at the bank.

Drew has offered to resign since the disclosure of the firm’s loss, which could top $4 billion.

On Thursday, JPMorgan Chase’s CEO Jamie Dimon admitted the trading loss was an "egregious" failure in a unit managing risks, but he added that just because the bank did something "stupid" doesn't mean other firms are having such trouble.

"There were many errors, sloppiness and bad judgment," Dimon said.  "These were grievous mistakes, they were self-inflicted."

The loss reportedly came within the last six weeks and resulted from losing bets on "synthetic credit securities" -- the same kind of instruments that nearly led to a collapse of the financial system in 2008, prompting a nearly $1 trillion government bailout.

Congress and the FDIC have been grappling with how to prevent "too big to fail" institutions from taking big risks knowing that the U.S. Treasury is there to back them up.

According to the Wall Street Journal, the Securities and Exchange Commission has started an early stage review into the loss.

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Copyright 2012 ABC News Radio

Friday
May112012

JPMorgan Trading Loss Roils Markets, Raises Fears About Bank Risks

STAN HONDA/AFP/Getty Images(NEW YORK) -- JP Morgan Chase & Co. is rocking the financial markets with the disclosure that its in-house trading operating lost $2 billion in the past six weeks, raising new questions about whether the big banks that caused the financial meltdown have sufficiently changed their ways.

Chief Executive Officer Jamie Dimon said the trading loss was an "egregious" failure in a unit managing risks, but he added in a call with analysts after the markets closed Thursday that just because the bank did something "stupid" that doesn't mean other firms are having such trouble.

"There were many errors, sloppiness and bad judgment," Dimon said.  "These were grievous mistakes, they were self-inflicted."

Congress and the FDIC have been grappling with how to prevent "too big to fail" institutions from taking big risks knowing that the U.S. Treasury is there to back them up.

JPMorgan, the largest U.S. bank, traced its big loss to the firm's chief investment office, run by Ina Drew.  His unit made losing bets on "synthetic credit securities" -- the same kind of instruments that nearly led to a collapse of the financial system in 2008, prompting a nearly $1 trillion government bailout.

Global markets fell on Friday after the big surprise trading loss at JPMorgan Chase shook investor confidence, while political chaos in Greece continued to cast uncertainty over its future in the euro currency bloc.

JPMorgan stock plunged almost 7 percent in after-hours trading, and the unexpected loss at one of the world's most venerated banks undermined investor confidence.  British banks were hit hard -- Barclays, which has a large investment banking arm, was the biggest loser in London trading, down 2.9 percent by midmorning.

In Europe, the FTSE 100 index of leading British shares dropped 0.3 percent at 5,525, while Germany's DAX fell 0.3 percent too to 6,498.  The CAC-40 in France was 0.7 percent lower at 3,107.

The euro was up 0.2 percent at $1.2952, though still near four-month lows against the dollar.

Wall Street headed for a lower opening on Friday, with both Dow futures and S&P 500 futures down 0.5 percent.

Copyright 2012 ABC News Radio

Monday
Jan232012

Wall Street Poised for More Gains in Upbeat 2012

Hemera/Thinkstock edit Delete caption(NEW YORK) -- U.S. stock futures are pointing higher on Monday, setting up Wall Street to continue to add on to its three straight weeks of gains so far in 2012.

Last week, the stock market closed mostly up, with the Dow Jones Industrial Average adding 97 points on Friday and the S&P 500 climbing one point.  The Nasdaq, however, couldn't stay in the green, slipping two points.

Overseas on Monday, European stocks are trading higher as talks over solving Greece's debt crisis continue.

In Asia, the few stocks that were open for trading ended the day with minimal losses.  Australia’s S&P/ASX 200 fell 0.34 percent and Japan's Nikkei index slipped 0.01 percent.

Many Asian markets were closed on Monday for the Lunar New Year.

Copyright 2012 ABC News Radio

Friday
Jan202012

Will Wall Street Continue Week of Gains?

Comstock/Thinkstock(NEW YORK) -- Wall Street has been on a roll this week, thanks in part to fairly positive earnings reports from big companies.

The stock market has managed to close out each day with gains, but will it be able to stay in the green as it looks to wrap up trading on Friday?  If futures are any indication, it appears Wall Street may have trouble doing so -- stock futures are mixed ahead of the opening bell.

The next big company investors will be eyeing is General Electric, which will release its fourth quarter results before trading kicks off on Friday.

Overseas, European stocks are trading lower on Friday as Greece negotiates with private creditors, looking to reduce the cost of its debts.

In Asia, stocks closed up for the day, with South Korea's Kospi leading the pack with a 1.82 percent jump.  Japan's Nikkei index followed, adding 1.47 percent.  China’s Shanghai Composite also rose 1.00 percent, while Hong Kong’s Hang Seng and Australia’s S&P/ASX 200 climbed 0.84 percent and 0.59 percent, respectively.

Copyright 2012 ABC News Radio

Thursday
Jan192012

Wall Street Headed for Flat Opening; Global Stocks Edge Higher

Hemera/Thinkstock(NEW YORK) -- U.S. stock futures are sitting flat Thursday ahead of more key earnings reports and a slew of economic data.

The day before, stocks closed at their highest level since last July.  The Dow Jones Industrial Average soared 97 points on Wednesday to end at 12,579, the Nasdaq advanced 42 points to close at 2,770, and the S&P 500 gained 14 points to finish at 1,308.

The results of fourth quarter earnings for big companies like Bank of America and Morgan Stanley will likely drive Wall Street up or down on Thursday.  The figures are being released before trading commences for the day.

Investors will also be keeping a close eye on the Labor Department's weekly report on jobless claims, as well as data on consumer prices and housing starts for December.

Overseas, European stocks are trading higher Thursday and Asian ones mostly closed up.  China’s Shanghai Composite rose 1.31 percent, Hong Kong’s Hang Seng climbed 1.30 percent, South Korea’s Kospi added 1.19 percent, and Japan's Nikkei index gained 1.04 percent.  Australia’s S&P/ASX 200, on the other hand, dropped 0.07 percent.

Copyright 2012 ABC News Radio







ABC News Radio