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Not that bad
JPMorgan Chase
(NYSE: JPM) began a much-anticipated earnings season with not-so-discouraging results. The second-largest bank in the U.S. said its net income fell by 4%, down to $4.26 billion. The decrease was less than expected thanks to a change in the way the bank accounted for its liabilities. The bank had a record net income last year of $17.4 billion, about $7 billion of which came from money set aside to offset losses.
Like most other American banks, JPMorgan has been affected by the European debt crisis. Bank of America (NYSE: BAC) has been particularly hard hit, losing about 51% of its stock price. But some optimism may help the banks as the European Union moves forward with aid and the Fed focuses on lifting the real estate market. Citigroup (NYSE: C) and Wells Fargo, reporting Oct.17, are expected to hit net incomes of $2.49 billion and $3.87 billion, respectively. Read more at Bloomberg.
Bad News for News Corp.
More problems seem to have arisen for News Corp. (Nasdaq: NWS), whose credibility and journalistic integrity have already been damaged. Dow Jones Co., owned by News Corp., was criticized for an alleged deal with a Dutch company to boost circulation of The Wall Street Journal Europe. The company allegedly made agreements with a firm called Executive Leadership Partnership to sell it a bulk of newspapers, about 12,000, for only one European cent a piece. ELP would host events and distribute the paper, and in return the Journal featured two favorable articles about ELP. On Tuesday, Andrew Langhoff, managing director for Dow Jones in Europe, Africa, and the Middle East, and publisher of The Wall Street Journal Europe, resigned. The paper's total circulation is about 75,000. By boosting circulation, the paper could reel in more advertisers. Read more at The Wall Street Journal and The Guardian.
BlackBerry cost
Many carriers are facing expensive compensations after Research In Motion's (Nasdaq: RIMM) BlackBerry Network lost service for about three days in regions across the globe. Vodafone (Nasdaq: VOD), the largest mobile-phone operator, said it was looking at different options to compensate users. Telefonica (NYSE: TEF), the Spanish communications giant, said it would compensate its users based on the time of service lost, while Emirates Telecommunications said it would refund all BlackBerry customers.
Though it may not be the carriers' fault, it has come at a hefty price for them. RIM said today that though there is improved service, the problem has not been completely fixed. For RIM, the cost comes as a hit to its reputation as it struggles to compete with newer and better smartphones. Read more at Bloomberg.
China's slowdown
In a widespread economic downturn, China's lower-than-expected trade surplus was one more sign all markets have been loosening. The International Monetary Fund warned that Asia could see strong side effects if European and American troubles continue. The surplus narrowed down to $14.5 billion in September, the second consecutive decrease. However, U.S. lawmakers continue to say China has kept the yuan unfairly low against the dollar, and are pressuring the country to increase its currency as the Senate passed a currency bill. Chinese lawmakers responded by saying a higher yuan is already hurting its exports. The bill would impose tariffs on some goods if the Treasury Department determines China is undervaluing its currency to its advantage. Chinese authorities have let the yuan have a gradual increase since mid-2010 as its economy begins to slow down. Read more at The New York Times.
So there you have it, the top financial stories for this afternoon. If you are interested in getting all the news and commentary on these stocks, sign up to My Watchlist here; it's free!
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