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Market Recap: JPMorgan's $2B Mistake Brings Markets Down


Markets closed down today:

▼ Dow: -0.27 percent

▲ Nasdaq: +0.01 percent

▼ S&P: -0.34 percent

Precious metals:

▼ Gold: down -0.78 percent to $1,579.70 an ounce

▼ Silver: down -0.60 percent to settle at $28.89 an ounce


▼ Oil: -0.93 percent

Markets were down because:

JPMorgan's surprise $2 billion trading loss prompted a sell-off in financial stocks Friday, with smaller declines across the broader market as investors decided this was more of a problem for investment banks than for other industries.

Most of the 10 industries in the Standard & Poor's 500 index were flat or posted modest declines; financial stocks fell 1.1 percent.

For that, the other investment banks could thank JPMorgan, America's biggest bank. The stock plunged 9.3 percent, dragging other banks with big Wall Street operations down with it. Morgan Stanley fell 4.2 percent and Goldman Sachs fell 3.9 percent. Citigroup fell 4.2 percent.

Retail-focused banks fared better. Wells Fargo edged up 0.4 percent.

JPMorgan's blunder comes in the midst of a political battle over how closely to regulate banks, though JP Morgan's CEO Jamie Dimon said the trades would not have been affected by the so-called Volcker rule, expected to take effect this summer. Still, the $2 billion loss is sure to be used as ammunition by those pushing for tighter regulation of investment banks.

The Dow Jones industrial average fell 34.44 points to close at 12,920.60. It had waffled around with small gains and losses throughout most of the day before settling into the red in the afternoon.

The Standard & Poor's 500 index fell 4.60 points to close at 1,353.39. The Nasdaq composite index, which is heavily weighted with technology stocks, was up 0.18 points to 2,933.82.

Also Friday, the Labor Department said that the producer price index, which measures price changes before they reach the consumer, dropped 0.2 percent last month. It was the first decline since December and the biggest drop since October. Declines were driven by gas and energy prices. That's good news for consumer spending.

Separately, a closely watched measure of consumer confidence from the University of Michigan released Friday morning was better than analysts had expected. The index was at its highest level since January 2008.

Oil prices fell 95 cents to $96.13 per barrel. Gold fell $11.50 to $1,584 per ounce.

The Associated Press contributed to this report.

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