The multi-billion dollar loss suffered by JPMorgan Chase helped drag down other bank stocks in early morning trading on Friday. The blunder by JPMorgan undermined the confidence of investors in other finance firms in Wall Street.
The bank stock sell offs were led by JPMorgan, which saw its stock plummet by over 8% in Friday morning trading after the bank revealed on Thursday it had suffered over $2 billion in trading losses since late March.
Those problems affected a number of other banking stocks. Citigroup was down close to 4%, while Morgan Stanley dropped by over 5%. Bank of America slipped by close to 3% and Goldman Sachs retreated by close to 5%. Wells Fargo, which was down in pre-market trading, was up by about 1%.
The problems with the trades in JPMorgan caused company CEO Jamie Dimon to call an impromptu conference call with analysts. He told the listeners that the net losses for the company might well exceed $800 million at the end of the company’s second quarter. Before he made that statement, the profit for the unit was estimated to be over $200 million.
Dimon explained to analysts that the losses in trading were the result of bad judgment and sloppiness, but pushed aside the question of whether there were other banks affected by the losses.
Dimon said, “If we are stupid, it does not mean the rest of industry is stupid as well.”
