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Will JPMorgan Sabotage the Dow's Record Streak?

At some point, the string of record highs that the Dow Jones Industrials (DJINDICES: ^DJI  ) have posted must end. Early on, it looks like today may prove to be that day, as the Dow is down 44 points, or 0.3%, just before 11 a.m. EDT, dropping back below the 14,500 level. With consumer confidence falling to its lowest level in more than a year and the Consumer Price Index having spiked upward 0.7% as expected in February due to higher gas prices, today may prove to be the day on which the Dow says eight is enough and gives up some ground.

Within the Dow, JPMorgan Chase (NYSE: JPM  ) has fallen the most, dropping 2.2% after the bank came under fire on multiple fronts. The Federal Reserve approved its plans for dividends and stock repurchases but also said it would need to submit new plans for dealing with a potential future recession within the next six months. Moreover, Senate lawmakers attacked the bank for bad risk-management, arguing that it misled investors and regulators in connection with the now-infamous "London Whale" scandal. JPMorgan has overcome controversy before, but at some point investors may lose confidence in its ability to handle repeated attacks on its reputation.

Elsewhere, VirnetX (NYSEMKT: VHC  ) dropped another 7.6% following yesterday's 28% loss after the company lost a key patent suit against Cisco Systems (NASDAQ: CSCO  ) . VirnetX had enjoyed great success in winning similar cases and obtaining settlements in the past, and most investors thought Cisco would join the ranks of those paying substantial damages. With the jury having found no infringement, VirnetX will miss out on a major potential source of revenue. Cisco, meanwhile, has risen 0.5%.

Finally, Ulta Salon (NASDAQ: ULTA  ) plunged 14.4% after providing disappointing guidance in its quarterly report last night. The company beat earnings estimates for the fourth quarter but said its first-quarter sales and earnings would fall short of what analysts had expected. Given the stock's high multiple, investors aren't inclined to cut it much slack when it comes to threats to its future growth.

JPMorgan has been controversial for a while, but its shares are still arguably bargain-priced. Will the bank bounce back? To help you figure out whether JPMorgan is a buy today, I invite you to read our premium research report on the company today. Click here now for instant access!

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DocumentId: 2315398, ~/Articles/ArticleHandler.aspx, 9/28/2016 9:39:21 PM

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Related Tickers

9/28/2016 5:27 PM
^DJI $18339.24 Up +110.94 +0.61%
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JPM $66.71 Up +0.35 +0.53%
JPMorgan Chase CAPS Rating: ****
ULTA $240.20 Down -3.46 -1.42%
Ulta Salon, Cosmet… CAPS Rating: ****
VHC $3.26 Up +0.13 +4.15%
VirnetX Holding CAPS Rating: *