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Stock Market Today: What Investors Can't Miss

Companies making headlines in the stock market today include Dell (Nasdaq: DELL), Johnson & Johnson (NYSE: JNJ), and JPMorgan Chase (NYSE: JPM).

After Tuesday's closing bell Dell (Nasdaq: DELL) gave shareholders good news: it will begin paying a dividend later this year.

The struggling tech company expects to pay quarterly cash dividends of 8 cents per share on all common stock starting during the third quarter of this year.

Using Tuesday's closing price of $11.97 as a benchmark would give Dell a dividend yield of 2.7%, higher than the average yield of the stocks in the S&P 500.

Dell's CFO Brian Gladden hopes this move can turnaround the beleaguered company whose stock is trading well below its 52-week high of $18.36.

"The payment of a quarterly cash dividend to Dell's shareholders adds another element to our disciplined capital allocation strategy," Gladden said.

Dell stock was up more than 4.5% in early trading Wednesday.

Johnson & Johnson (NYSE: JNJ) announced after market close Tuesday that it will be able to complete its acquisition of Swiss medical device maker Synthes on Thursday, much earlier than expected.

JNJ initiated the $19.7 billion deal, its largest ever, in April 2011. The purchase will make JNJ a prominent player in the orthopedic surgery business. Synthes also offers a strong presence in emerging markets like Russia, China and India.

In a turnaround of expectations JNJ stated that the deal will actually add 3 to 5 cents per share to its annual earnings. Earlier projections by the company stated the move would trim up to 22 cents off of its profits.

Johnson and Johnson stock rose more than 2% in early market trading today.

Finally, JPMorgan Chase (NYSE: JPM) hopes to win back investors with a little humility.

In a testimony before the Senate Banking Committee on Wednesday JPMorgan CEO Jamie Dimon explained and somewhat apologized for JPMorgan's well-publicized trading loss.

"We have let a lot of people down," Dimon said, "and we are sorry for it."

Dimon stated that the bank's massive loss can be blamed on a lack of sufficient risk controls and a failure by traders to understand the bets they were placing.

JPMorgan Chase Price History
(Nasdaq: JPM)

Commenting on those traders Dimon said they "did not have the requisite understanding of the risks they took."

That is a scary testament as any institutional bank, especially one as large as JPMorgan, should very well understand the risks associated with the bets and trades they make.

Committee Chairman Sen. Tim Johnson, D-SD, asked, "How can a bank take on 'far too much risk' if the point of the trades was to reduce risk in the first place? Or was the goal really to make money?"

Many experts, including Money Morning's Shah Gilani, think that JPMorgan knew full well what it was doing.

"It was a bet designed to make money that was designed to look like a hedge. Which only was ever going to be called a "hedge" if they lost money on it," Gilani explained last month.

The losses were initially reported to be $2 billion and now estimates range upwards of $7 billion.
Dimon on Wednesday promoted the bank's prospects saying the firm will be "solidly profitable" in the second quarter.

Dimon will return to Capitol Hill next week to face members of the House of Representatives.

As of 1 p.m. Wednesday JPM stock was up more than 3% following the testimony.

The Dow Jones Industrial Average today was up about 6 points, or 0.05%, by 1 p.m.

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  1. E C Long | June 21, 2012

    Want to study morning newsletter as it is interesting.

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