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Financial Stocks Roundup: JPMorgan Weighs on Financial Sector


Did JPMorgan understate losses? Plus, S&P's big loser today was AIG.

MINYANVILLE ORIGINAL Financial stocks are trailing the market today as JPMorgan Chase's (JPM) massive trading loss was reported to be 50% bigger than was reported a week ago.

JPMorgan shares are down 3.61% on reports that the London Whale, Bruno Iksil, actually made trades that cost the firm as much as $3 billion, rather than $2 billion.

The fiasco is definitely drawing plenty of regulatory attention and convincing some lawmakers that proprietary trading has to be reined in. The SEC issued a press release that described a closed meeting last Saturday in which regulator's five commissioners examined what happened at JPMorgan, what staff knew, and how to respond. The Obama administration is certainly using the incident as an opportunity to champion tougher rules on banks making speculative investments with their own money.

Bloomberg reported that the Commodity Futures Trading Commission might consider weakening provisions in the Dodd-Frank Act that regulates speculation in key commodities like oil and natural gas.

The Financial Select Sector SPDR ETF (XLF) declined today by 1.37% while the S&P 500 (SPY) fell 0.91%. The S&P's biggest loser today was American International Group (AIG), which declined 6.63% as the New York Fed postponed the sale of assets that it acquired when it rescued the company. Concerns about Europe's stability, especially since Greece will hold another round of elections in a month, have depressed markets. US treasury notes rallied, with yield on the 10-year note matching an all-time lowest close of 1.71%.

Spain is injecting capital into Bankia, but customers are not convinced that the bank is going anywhere but down. Depositors withdrew one billion euros from the bank. Moody's is aiming to downgrade 21 Spanish banks, according to reports in the Spanish media.

Twitter: @vincent_trivett
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