Based on the strength of today's unemployment claims report, the Dow Jones Industrial Average (^DJI 0.31%) started off strong and held a steady line for the day's session, finishing up 0.6%, or 84 points, to close at 14,539. It was the first time the Dow broke 14,500, and the blue chips' tenth consecutive day of gains. The S&P 500, meanwhile, closed just two points away from its all-time closing high, finishing at 1,563, up 0.6% or nine points. Trading was light, as it has been all week, on relatively little news.
Initial unemployment claims continued to decline, falling to 332,000 last week, significantly below economist expectations of 350,000. The four-week moving average, generally seen as a more accurate indicator of the job market, fell to 346,750, its lowest level in five years, indicating the labor market and the overall economy are continuing to improve.
After gaining 1.7% during the day, JPMorgan Chase (JPM 0.24%) shares were off 2% after hours after a Senate probe revealed that the banking giant was at fault in the so-called "London whale" that led to a $6.2 billion loss. The Senate subcommittee said that executives at JPMorgan ignored growing risks, and covered up losses from shareholders and government oversight. Carl Levin, the chairman of the subcommittee, said the bank made "many, many failures," some of which were "serious and indeed egregious."
Separately, JPMorgan said it would cut its buyback plan in half, to $6 billion over the next 12 months, and raise its quarterly dividend from $0.30 to $0.38, after the Federal Reserve released its decisions on the big banks' plans to return capital. The Fed cited "weaknesses" in JPMorgan's plan, and requested resubmission by the end of the third quarter.
Bank of America (BAC 0.41%) fared better, jumping 3% after hours, as the Fed approved its plan to repurchase $5 billion in common stock, and $5.5 billion in preferred shares. Bank of America had formerly been under close oversight by the Fed as it struggled to recapitalize following the financial crisis. B of A did not request permission to raise its quarterly dividend, which sits at just $0.01. Banking shares were generally up after hours, because the Fed gave full approval to all 18 lenders under review except JPMorgan Chase, Goldman Sachs, BB&T, and Ally Financial.
Elsewhere, Amazon.com (AMZN +1.25%) shares took a hit, falling 3.4% after JPMorgan downgraded its rating on the online titan from "overweight" to "neutral." JPMorgan said it saw gross profit growth slowing as the retailer switches from first-party to third-party sales. Analyst Doug Anmuth expects gross profit growth to drop from 40% in 2012, to 31% this year.
