JP Morgan profit boosts US stocks

Dow Jones Industrial Index hits 10,000 mark, following bank's earning surge.

    Dimon said the results were positive, but offered
    a cautious outlook [GALLO/GETTY]

    More than half the profit, or $1.9bn, came from investment banking. The company lost $700m on credit card operations and $1.0bn in consumer loans.

    It also set aside $3.8bn for credit losses, compared with $2.0bn in the prior year.

    JP Morgan is the first of the US big banks to report its third-quarter earnings. Bank of America, Citigroup and Goldman Scahs are to release their own results later in the week.

    Banking success

    Jamie Dimon, JP Morgan's chairman and chief executive, said the results were positive but offered a cautious outlook.

    "While we are seeing some initial signs of consumer credit stability, we are not yet certain that this trend will continue," he said.

    The profit announcement by what is now America's second largest bank also served to off-set the poor performance seen in US retail sales, which fell last month, after the government's "cash-for-clunkers" scheme came to end.

    Without the scheme, auto sales fell 1.5 per cent over August and were off more than five per cent over the same time last year.

    Meanwhile, the success in the banking sector has rekindled anger over executive pay for bankers.

    Executives at Wall Street's big banks and investment houses are set to collect nearly $150bn in bonuses, while ordinary Americans face pay cuts and the worse jobless rate in decades.

    In June, JP Morgan repaid the government for its $25bn capital injection, given to the company as part of efforts to shore up the banking sector following the financial crisis.

    SOURCE: Agencies


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