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US stocks extend declines as bank worries persist

US stocks extend declines as bank worries persist

Wall Street continued its slide early Thursday as investors examined a pair of weak readings on the economy and a better-than-expected report from JPMorgan Chase & Co. but remained concerned about the banking sector.
The Dow Jones industrial average fell 110 points, declining for the seventh straight session after the Labor Department said new claims for jobless benefits increased more than expected last week. The rise follows two weeks of declines. The department also said wholesale prices dropped for a fifth straight month as gasoline prices fell by a record amount. While the reports indicated that the economy remains in poor shape, investors seemed to look past the data.
Even with results that topped expectations, a discouraging outlook from JPMorgan Chase & Co. kept investors on edge. The huge banking company managed to avoid a loss, reporting better-than-expected earnings of 7 cents per share in the October-December quarter. Analysts had predicted the company would break even.
Still, Chief Executive Jamie Dimon called the quarter "very disappointing." The bank said it increased its reserves to cover potential loan losses by $4.1 billion. Higher loan losses are likely if the economy deteriorates further, which is a "distinct possibility," Dimon said.
JPMorgan is the first big U.S. bank to release fourth-quarter earnings, and analysts and investors are looking at it for signs of how the rest of the industry may be faring. The bank, which bought failing Bear Stearns Cos. and Washington Mutual Inc. last year, is viewed as one of the stronger players in the industry, so results from other big banks could prove even worse.
In the first half-hour of trading, the Dow fell 110.23, or 1.34 percent, to 8,089.91.
Broader stock indicators also fell. The Standard & Poor's 500 index declined 13.71, or 1.63 percent, to 828.91, and the Nasdaq composite index fell 19.31, or 1.30 percent, to 1,470.33.
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On the Net:
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Updated : 2021-07-24 05:51 GMT+08:00