14/10/2011 - 06:48

Banks sink as US stocks close mixed

14/10/2011 - 06:48

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Banks sink as US stocks close mixed

Falling banking stocks dragged the US equity market down on Thursday amid worry about fallout from a Greek default, but Apple and Google helped the Nasdaq gain for a fourth straight day.

The Dow Jones Industrial Average fell 40.72 points (0.35 per cent) to finish at 11,478.13.

The S&P 500, a broader measure of the markets, fell 3.59 (0.30 per cent) to 1,203.66, while the tech-heavy Nasdaq Composite gained 15.51 points (0.60 per cent) to 2,620.24.

"US stocks spent most of the session south of breakeven today, with banks leading the retreat in the wake of a less-than-stellar earnings showing from JPMorgan Chase," said Andrea Kramer at Schaeffer's Investment Research.

JPMorgan Chase, the first big bank to report third-quarter earnings, tumbled 4.8 per cent to $US31.60 after posting a drop in profit, but not as much as analysts expected thanks to a $US1.9 billion risk accounting revision.

Acknowledging a "challenging investment banking and capital markets environment," the bank reported profit of $US4.3 billion, down four per cent from the same quarter in the previous year.

Bank of America lost 5.5 per cent, Citigroup dropped 5.3 per cent and Morgan Stanley shed 4.4 per cent.

European stocks were also sharply lower on falling banking sector shares, amid heightened fears over lender exposure to the eurozone debt crisis and the potential impact of more recapitalisation.

In the technology sector, internet giant Google starred, adding 1.9 per cent at $US558.99. After the market closed, Google reported third-quarter profit of $US9.72 billion and a 30 per cent jump in revenue from a year ago.

Apple rose 1.6 per cent to $US408.43 after it won a temporary ban on Samsung selling its Galaxy Tab 10.1 in Australia.

The bond market rallied. The yield on the 10-year Treasury fell to 2.17 per cent from 2.23 per cent late Wednesday, while that on the 30-year Treasury dropped to 3.12 per cent from 3.21 per cent.

Bond yields and prices move in opposite directions.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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