Wall Street stumbled on Thursday after JP Morgan reported tepid quarterly earnings and on fears of a global slowdown in China.
Another lackluster report on the labor market also dragged stocks down.
In afternoon trading, the Dow Jones industrial average fell 106 points, or 0.93 percent, to 11,412.14. JPMorgan Chase Co. was down 6.78 percent, the biggest loser of the 30 companies that make up the Dow. Shares of Citigroup, Morgan Stanley and Bank of America also took a beating.
The broader SP 500 fell 12.70 points, or 1.05 percent, to 1,194.55 and the tech-heavy Nasdaq dipped 5.44 points, or 0.21 percent, to 2,599.29.
The Associated Press reports:
JPMorgan is the first big U.S. bank to announce quarterly results. Next week Wells Fargo Co., Citigroup Inc. and Morgan Stanley will report. JPMorgan is considered one of the industry’s leaders, so their results don’t bode well for other financial companies, said Jason Lilly, a portfolio manager at Rockland Trust Investment Management Group.
JPMorgan’s net income fell 4 percent in the July-September period. Fees from investment banking dropped 31 percent because of severe turbulence in financial markets this summer. The bank said it was concerned about the ability of consumers and businesses to manage their debts.
Troubles in China are also contributing to the stock slump. According to the New York Times:
China’s trade surplus narrowed for a second straight month in September, suggesting further cooling in the Chinese and global economies. The country’s trade surplus fell to $17.8 billion in August, well below July’s 30-month high of $31.5 billion, largely on the back of lower export growth — a sign that the stalling global economic recovery is could weigh on China’s elevated economic growth.
And yet another drag on stocks was a flat reading on the labor market. As msnbc.com’s Pat Rizzo reported earlier today:
About as many Americans filed new claims for unemployment benefits in the latest week as did so the previous week, revealing a labor market idling in neutral.
The Labor Department reported Thursday that seasonally adjusted initial claims came in at 404,000, down 1,000 from a revised 405,000 for the previous week.