JPMorgan Chase (NYSE:JPM) and the financial sector are weighing on the Dow Jones Industrial Average (DJINDICES:^DJI) down amid mixed reports on the economy. As of 1:15 p.m. EDT the Dow and the S&P 500 (SNPINDEX:^GSPC) were both within 0.1% of breakeven.

The financial sector is dipping today after the International Monetary Fund lowered its growth estimates for the U.S. economy this year to just 2% growth. In April the IMF had projected the U.S. to grow 2.8% this year.

Source: International Monetary Fund.

The IMF said the reason for its forecast cut was that the "harsh winter conspired with other factors (including inventory drawdown, a still-struggling housing market, and slower external demand) [so that] momentum faded in the U.S economy." While the IMF still expects 2015 growth of 3%, the IMF's forecast cut follows the World Bank's cut of its 2014 U.S. growth estimate from 2.8% to 2.1%.

Slow growth means the Federal Reserve will likely keep rates low longer than the market had expected. The financial sector is being challenged right now by low long-term interest rates, as banks profit from the spread between short-term rates and long-term rates. As long-term rates continue to drop and the Federal Reserve keeps short-term interest rates effectively at zero, banks will struggle to profit.

With the news of the forecast cut, financials are weighing on the stock market today.


Leading the Dow Jones financials' drop today is JPMorgan Chase, down 0.3%. Aside from the aforementioned obstacles, JPMorgan is now facing a lawsuit by the City of Miami for predatory and discriminatory lending. This comes just weeks after the City of Los Angeles filed a similar suit against JPMorgan Chase and other major mortgage lenders.

The fallout from the financial crisis continues to dog JPMorgan Chase and other major mortgage-lenders. While bank balance sheets are the strongest they've been in years, big banks continue to pay the price for their conduct during the financial crisis and its aftermath, and they continuously have to devote a significant portion of their profits to pay for more lawsuits.