Financials Weigh on the Dow Jones Today as JPMorgan’s Earnings Come up Short

JPMorgan Chase (NYSE: JPM  ) is leading the Dow Jones Industrial Average (DJINDICES: ^DJI  ) lower as the nation's largest bank's disappointing earnings bode ill for the financial sector as a whole. As of 1:25 p.m. EDT the Dow is down 117 points to 16,053. The S&P 500 (SNPINDEX: ^GSPC  ) is down 10 points 1,823.

JPMorgan Chase is down 3.1% after reporting that first-quarter income dropped 20% year over year to $5.3 billion, or $1.28 per share, missing analyst expectations of $1.40 per share.

Revenue was down 8% year over year from $25.8 billion to $23.8 billion, well below analyst expectations of $24.5 billion. With interest rates far higher this quarter than where they were last year, mortgage originations fell 68% year over year to $17 billion as fewer people bought houses or refinanced their mortgages.

10 Year Treasury Rate Chart

10 Year Treasury Rate data by YCharts.

Also contributing to the 8% drop in overall revenue was a drop in bond trading revenue, down 21% year over year to $3.8 billion, and consumer banking revenue, which fell 25% from the prior-year quarter.

As the U.S.' largest bank, JPMorgan is a bellwether for the rest of the financial sector. Thanks in part to the company's poor earnings, the rest of the Dow's financial stocks are dropping today. Visa and Goldman Sachs are also among the Dow's worst performers today, and because of their relatively high stock prices, they're having an outsize impact on the index. Goldman's drop can be attributed to JPMorgan's weaker-than-expected results, as Goldman is heavily dependent on its fixed-income and commodities group. While Goldman is largely seen as a more skilled trader than JPMorgan, Goldman faces the same market dynamics as JPMorgan, so its fixed-income unit likely did not do much better than JPMorgan's.

Visa, on the other hand, has been moving in line with the market for the past few days, and I wouldn't attribute its move to JPMorgan's earnings. In fact, credit card activity was actually one of the bright spots in JPMorgan's earnings: The bank reported that credit card sales volume was up 10%.

Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2912344, ~/Articles/ArticleHandler.aspx, 9/2/2015 9:01:40 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Dan Dzombak

Dan Dzombak has written for The Motley Fool since 2008. He covers value investing, investing process, and success among other things. You can follow him on Facebook or Twitter by clicking the buttons below or head over to his blog at

Today's Market

updated 11 hours ago Sponsored by:
DOW 16,058.35 -469.68 0.00%
S&P 500 1,913.85 -58.33 0.00%
NASD 4,636.11 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/1/2015 4:35 PM
^DJI $16058.35 Down -469.68 +0.00%
^GSPC $1913.85 Down -58.33 +0.00%
S&P 500 INDEX CAPS Rating: No stars
GS $182.12 Down -6.48 +0.00%
Goldman Sachs CAPS Rating: ***
JPM $61.45 Down -2.65 +0.00%
JPMorgan Chase & C… CAPS Rating: ****
V $68.96 Down -2.34 +0.00%
Visa CAPS Rating: ****