Topic: Growth Stocks

Wall Street Stock Forecaster Hotline – Friday, May 11, 2012

Article Excerpt

J.P. MORGAN CHASE & CO., $36.96, New York symbol JPM, fell 9% on Friday after it announced an unexpected loss at its trading division. Morgan uses complex derivatives that act like insurance contracts on the corporate bonds it holds. Due to volatile bond prices, Morgan has lost $2 billion on these hedges since the start of April 2012. The bank is now trying to get out of them, but depending on bond prices, Morgan could lose another $1 billion before it is able to do so. To put these figures in context, Morgan earned $5.4 billion, or $1.31 a share, in the three months ended March 31, 2012. The bank has tightened its internal oversight to prevent future losses of this size. That should help limit any permanent damage to its reputation. However, these latest hedging losses will fuel calls for greater government regulation over how banks manage their investments. J.P. Morgan Chase is still a hold. J.P. Morgan Chase was recently covered in the…