The final earnings season of 2012 is well under way, and... it's not looking pretty.
Aluminum producer Alcoa (AA) kicked things off on Tuesday with a tepid report, sending shares down as much as 5.6% the next day. Third-quarter results were fine, but guidance for the coming quarter is far too gloomy.
So the first big batter on deck struck out, its Dow Jones (^DJI -0.65%) pedigree notwithstanding.
The tragedy continued on Friday morning as fellow Dow member JPMorgan Chase (JPM 0.06%) also whiffed big -- perhaps on a technical error. The megabank beat Wall Street's earnings targets by a country mile and reported that the heavily covered "London Whale" losses were in line with early estimates. But JPMorgan had to write off $825 million in home equity loans this quarter and CFO Doug Braunstein may have been forced out of his post. That adds up to a 1.2% price drop today, the Dow's second-largest swoon.
The biggest loser? Bank of America (BAC 0.45%), which doesn't even report results until next week, fell 2.7% on no particular news of its own. Investors are clearly seeing bad omens in the bank sector's tea leaves today.
Oh, it's not all JPMorgan's fault. Wells Fargo (WFC 0.89%) also reported results on Friday morning, and that stock plunged as much as 4.3% on the news. Fargo also crushed earnings targets, but barely missed on the top line. More important, the profitable spread between interest rates on loans and investments narrowed further than expected. That's bad news for the bottom line of any bank -- now and in the future.
