JPMorgan Chase profits rise, but so do loan losses

JPMorgan Chase & Co.’s $3.28 billion profit report carried a sobering message: Consumers are still struggling to pay off their loans, posing a threat to a strong economic recovery.

Even as the bank reported Friday its earnings more than quadrupled from $702 million during the final three months of 2009, JPMorgan said it’s not finished setting aside money to cover failed loans. In other words, it expects many more consumers to default to default on mortgages and other loans.

JPMorgan is the first of the big banks to announced fourth-quarter earnings. Its profits came from investment banking and asset management, businesses that have boomed as Wall Street remains far ahead of Main Street. And analysts expect other banks to show similar results. [Read the full article]

U.S. consumer prices rose modestly last month, while industrial output rose on a cold snap, suggesting the economy was growing but not generating a level of inflation that would spur the Federal Reserve to roll back from its stimulative policies.

But even as Friday’s data showed the recovery from the worst downturn since the 1930s was gaining traction, consumers remained cautious about the economy’s prospects in the face of stubbornly high unemployment.

The Reuters/University of Michigan Surveys of Consumers’ preliminary index of sentiment for January inched up to 72.8, from 72.5 in December. The reading was the highest in four months, but it fell short of market expectations.

“It is still reflecting improving conditions. [Read the full article]

U.S. stocks slid on Friday after JPMorgan Chase & Co reported deep fourth-quarter loan losses and raised concerns about bank profits.

Following a poor retail sales report earlier in the week, a weaker-than-expected Reuters/University of Michigan Surveys of Consumers for early January hurt shares as consumer unease grew about incomes and unemployment.

The first round of major quarterly earnings reports this week has been mixed, leaving investors uncertain about whether stocks can build on strong gains since March 2009. The Dow and S&P 500 hit their highest levels in more than 15 months on Thursday.

JPMorgan (NYSE:JPM – News), the first major bank to report quarterly results, announced heavy losses on mortgage and credit card loans, sending its shares down 2.3 percent to $43.68. [Read the full article]

The Trustees of Mesabi Trust (NYSE: MSB – News) declared a distribution of fifty-five cents ($0.55) per Unit of Beneficial Interest payable on February 20, 2010 to Mesabi Trust unitholders of record at the close of business on January 30, 2010. This compares to a distribution of eleven cents ($0.11) per Unit for the same period last year.

The forty-four cents ($0.44) per Unit increase in the current distribution, as compared to the distribution for the same quarter last year, is attributable to a significant increase in the volume of shipments of iron ore pellets during the most recent quarter as reported by Northshore Mining Company (“Northshore”), the lessee/operator of the mine on Mesabi Trust lands. [Read the full article]

You may also like...