Dow Hits a Triple-Digit Slump Behind JPMorgan's Pre-Earnings Plunge

Chevron also falls on a downbeat day from the markets.

Apr 10, 2014 at 2:30PM
Daily Fool

The recent stock slump continues with steep downturns hitting all three major U.S. indices as of midafternoon Thursday. The Dow Jones Industrial Average (DJINDICES:^DJI)was down more than 203 points as of 2:30 p.m. EDT, retreating further from the record highs it flirted with just last week; all but three of the index's blue-chip member stocks have tumbled today. JPMorgan Chase (NYSE:JPM) has fallen to the bottom of the Dow ahead of its earnings report tomorrow, while fellow index member Chevron (NYSE:CVX) is also on the downswing. Let's catch up on what you need to know.

China can't break loose

China Flag

Source: Wikimedia Commons

China kick-started the big market slump this morning with disappointing trade data. Exports from the world's second-largest economy plunged by 6.6% in March, light years away from the 4.9% gain that economists had forecast. Meanwhile, the country's imports also dove more than 11% for the month. While China did post a trade surplus for March to bounce back from February's trade deficit, economists aren't too convinced the closely watched emerging market is headed for clear sailing just yet. While exports did fall more in February, China is reliant on trade to keep its growing economy moving forward at full steam. Some analysts have even lowered growth projections for the economy to 7.4% in 2014, just below Beijing's 7.5% growth target.

JPMorgan's stock has fallen by 2.7% today as the hours count down to its Friday earnings report. Analysts on average expect earnings per share of $1.40 for the quarter, a drop of more than 10% year over year. It's been rough going for JPMorgan and its shareholders as of late, with CEO Jamie Dimon on Wednesday noting that the bank "was under constant and intense pressure" last year.

Legal woes have taken a big bite out of the company's earnings, and moving past those hurdles should help JPMorgan in the future. The company dealt with more than $20 billion in legal charges in 2013, and investors should expect a rebound from that unsettling trend this year. The company is focused on its core, best-performing businesses, and now it's up to tomorrow's data to see if JPMorgan can bounce back from 2013.

Meanwhile, Chevron's stock has fallen 1.0% to rank among the Dow's biggest losers as of midafternoon. The company made news today when it announced it will invest $1.6 billion into drilling in Argentina, signing the deal with the country's state-run enterprise YPF. The move comes after rival ExxonMobil announced a decline in capital spending, as companies across Big Oil deal with sluggish financial results in recent times. Chevron is projecting earnings to fall for the first quarter from the previous quarter, but keep an eye on whether the company follows up its Argentina investment with more projects to boost production in the near future.

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Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Chevron. The Motley Fool owns shares of JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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