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Banks Lose, Worries Mount as JPMorgan Drops $2B

NEW YORK CITY-The locally based bank blamed bad hedge trading for the loss in a conference call Thursday evening, bringing down bank stocks across the industry.

By Robert Carr | Updated on May 11, 2012

NEW YORK CITY-Banks were posting losses in pre-market trading, believed linked to the admission Thursday evening by JPMorgan Chase of a $2 billion trading loss. CEO Jamie Dimon admitted to the loss in a conference call, sending a shock through the shaky recovery of the US financial markets and threatening a drop in confidence to match last year’s second half stumble.

The locally-based bank, which had just started to see profits rise again after a slide to $28.38 per share in the second half of 2011, is looking at a more than 8% drop in share price to about $37 in pre-market trading. Other large banks are also looking at pre-market losses, including Bank of America (2% slide) and Citigroup Inc. (almost 4% drop).

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