On Thursday even the announcement of the Obama administration's proposal to tax banks wasn't enough to bring financial stocks down. Today all it took to send them into the red was JPMorgan Chase & Co.'s earnings report.
The KBW Bank Index fell 2.2% Friday, with nearly all of its components losing ground. Financials were the worst sector of the S&P 500 index, which dropped 1.1% overall. The Dow Jones industrial average slipped 0.9%.
The losses began after JPMorgan Chase kicked off the major banks' earnings season with a fourth-quarter report. The numbers were better than expected, but the report also showed evidence that credit losses remain a heavy drag.
"We don't know when the recovery is," Jamie Dimon, the chief executive, said after an analyst who had asked if JPMorgan Chase could predict when nonperforming assets would begin to decline. Some analysts saw JPMorgan Chase's losses on commercial real estate as a bad omen for the fourth-quarter performances of regional banks more heavily exposed to the sector.
Other nationwide bank stocks reacted poorly to the JPMorgan Chase report. Bank of America Corp. fell 3.15%, Citigroup Inc. fell 2.6% and Wells Fargo & Co. fell 3.1%.
Other big movers included Synovus Financial Corp., down 4.3%, and Fifth Third Bancorp. David George, an analyst with Robert W. Baird & Co., downgraded Fifth Third to "neutral," from "outperform," citing the rapid rise in its stock price over the past few months. Fifth Third fell 3.5% for the day but was still near its 52-week high.