The stock market today is trying to end what has been a negative week on a positive note.
Markets have traded down all week on global economic concerns and today are being held back by JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo & Co. (NYSE: WFC) even though the two financial giants posted record earnings.
Here's what's bringing those stocks down and why consumer sentiment is at a five-year high:
Yet, the low interest rates also hurt banks as they earned less money on loans. Wells saw its net interest margin, which indicates profitability on loans, fall more than 4.5% and the company missed analysts' estimates on revenue. JPMorgan's net interest margin fell more than 8.5% but the company did beat revenue forecasts. Another reason for concern is that both companies acknowledged legal worries in their earnings call. Wells was sued by the federal government on Tuesday for misleading regulators about the quality of loans and JPMorgan will face litigation for several issues. Most recently it was sued by the New York attorney general relating to mortgage-backed securities sold by Bear Stearns. On a call with reporters, JPMorgan CEO Jamie Dimon didn't sound too confident that his company's legal troubles would end anytime soon. "Obviously we're in a litigious society," Dimon said. "We have a lot of mortgage suits coming and others. ... Hopefully it will come down over time but we can't promise you that." WFC stock is down 3.5% in early trading and JPM stock is down 1.3%.
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The Dow Jones was down 10 points, or 0.07%, and the S&P 500 was down 5.59 points, or 0.39% as of noon.
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