The stock market finally broke its losing streak.
After five consecutive negative trading days the markets have finally rallied thanks to strong earnings reports from Wells Fargo and JP Morgan.
Wells reported another record quarter of earnings while JP Morgan felt the consequences of its "London Whale Trade."
JP Morgan announced the bet would cost the company a total of $5.8 billion, the high end of analyst's predictions. Of that loss $4.4 billion is accounted for in this quarter and the remaining $1.4 billion was put on last quarter's balance sheet.
What is positive about JP Morgan's earnings is the fact that the company was able to post profits despite the trading loss.
JPMorgan posted second-quarter net income of $4.96 billion, or $1.21 a share, compared with $5.43 billion, or $1.27 a share a year earlier.
The derivative loss after taxes reduced earnings per share by 69 cents, the company said.
Wells Fargo boosted its earnings 17% compared to the same quarter a year ago. Wells reported earnings of $0.82 per share beating expectations by a penny.
The markets are ignoring the main economic indicator released today. The University of Michigan's Consumer sentiment index came in at 72.0 its lowest level of the year, down from 73.2 in June.
The lousy trend of hiring coupled with global uncertainties and a volatile stock market have weakened household spending which accounts for 70% of the economy. The Michigan survey's index of consumer expectations for six months from now also fell to a yearly low to 64.8 from 67.8.
Besides Wells and JP Morgan here are two other companies making news today.
Affymx (Nasdaq: AFFY) is up more than 15% for the second day in a row as the biopharmaceutical company received positive news yesterday for its anemia drug Omontys.
The drug is used in dialysis patients and yesterday Fresenius Medical agreed to buy the drug for more than 100 of its U.S. dialysis centers.
The deal could be worth up to $700 million in sales. Affymx stock has been soaring since Omontys was approved and is up more than 110% over the past twelve months.
Affymx hopes that the success of Omontys will lead to even more use of the drug by Fresenius and other dialysis service providers.
"We believe the companies may opt to sign a new longer- term deal following the trial period," perhaps by the end of the year, Ian Somaiya an analyst at Piper Jaffray & Co., wrote in a note to clients. "We believe that once Fresenius makes the switch to Omontys, physicians, patients and support staff are unlikely to want to switch back to the more frequently given medications", he said.
AFFY stock was up 16% as of noon today.
Bridgepoint Education (NSYE: BPI) has had a rough week. The provider of postsecondary education, mostly online, has been hurt by two accreditation issues in the past five days.
On Monday shares sank 34% after the Western Association of Schools and Colleges (WASC) denied initial accreditation for Bridgepoint's Ashland University. The association said Ashland failed to meet academic standards.
Then today came the unexpected request by another association calling for a report on Ashland's enrollment records.
The Higher Learning Commission of the North Central Association of Schools and Colleges (HLC) is requesting Ashland to provide a report by August 10 detailing that the school meets minimum expectations for accreditation
Bridgepoint is trying to switch Ashland's accreditation from the HLC to the WASC but now it risks having no accreditation.
The university is currently accredited by the HLC through 2014-2015 but if it fails to receive a positive review from either board Bridgepoint may lose federal funding.
That could be damaging to the company as federal funding can account for 90% of for-profit schools' revenue.
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