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JPMorgan and Banks’ Blue Day: Monday’s IP Market Recap

Bank stocks and eurozone woes pull markets lower


InvestorPlace Market RecapIt was raining up and down the Eastern seaboard, but pouring in New York as the cloud over JPMorgan (NYSE:JPM) spread across Wall Street to cover banking sector and markets overall. Stocks suffered a steep opening drop before a mild afternoon rally trimmed the fall — somewhat.

When all was said and done the Dow dropped 125 points, or 0.98%, to end at 12,695, while both the S&P 500 and Nasdaq each lost a fraction over 1%, finishing at 1,338 and 2,903, respectively.

JPMorgan’s $2 billion trading loss announced on Friday reverberated over the weekend, and the fate of its chief investment officer was decided. JPM stock dropped 3% to end the day at $35.79.

Concerns over similar hedging-losses as yet unseen brought both Citigroup (NYSE:C) and Morgan Stanley (NYSE:MS) down over 4% on Monday, while Goldman Sachs (NYSE:GS), Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC) all suffered 2% losses.

Adding to the gloom was increasing uncertainty over the political situation in Greece, which still lacks a government, causing continued concerns over the eurozone’s stability.

On the upside, Groupon (NASDAQ:GRPN) traded up almost 18% all day in anticipation of a strong quarterly performance. Investors were rewarded as the company reported better-than-expected revenue for its first quarter on Monday, along with a strong future forecast. Shares were up an additional 10% in after-hours trading.

Beauty-products maker Avon (NYSE:AVP) announced  Sunday it will respond to Coty’s latest offer to acquire the company for $10.7 billion, or $24.75 per share, while also revealing that Warren Buffett’s Berkshire Hathaway (NYSE:BRK.B) was a backer of the bid. Shares of AVP were up 3% to $20 on the news.

Software maker BMC Software (NASDAQ:BMC) gapped up 8% to $43 on news that private equity firm Elliott Associates has taken a 5% stake in the company, and Yahoo (NASDAQ:YHOO) rose 2% to $15.50 on news that CEO Scott Thompson has left the company. Hedge fund investor Third Point will obtain three of the four board seats it was fighting for as part of a proxy battle.

Best Buy (NYSE:BBY) also rose on nonfinancial news, as founder Richard Schulze will step down as chairman after a probe found he failed to tell the board about allegations that then-Chief Executive Officer Brian Dunn was having an inappropriate relationship with a female employee. Shares rose 1.5%.

Three Up

  • Zynga (NASDAQ:ZNGA): Up 6.28% (47 cents) to $7.95
  • Chesapeake Energy (NYSE:CHK): Up 4.79% (71 cents) to $15.52
  • Arena Pharmaceutical (NASDAQ:ARNA): Up 3.93% (25 cents) to $6.61

Three Down

  • Shutterfly (NASDAQ:SFLY): Down 8.87% ($2.36) to $24.24
  • Silver Wheaton (NYSE:SLW): Down 7.79% ($2.06) to $24.40 (Read more about SLW here)
  • Advance Auto (NYSE:AAP): Down 6.88% ($6) to $82.34

Marc Bastow is an Assistant Editor at As of this writing he does not hold a position in any of the aforementioned securities.

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