Bank of America: Heading Into Earnings Loser
NEW YORK (TheStreet) -- Bank of America (BAC) was the loser among the largest U.S. banks on Monday, with shares declining over 1% to close at $11.47.
The Federal Reserve after the market close slapped JPMorgan Chase (JPM) with two cease and desist orders, one of which sprang from the firm's infamous "London Whale" hedge trading losses of $4.4 billion during the second quarter of last year, when the company still managed to end up with a profit of $5 billion, increasing to $5.7 billion in the third quarter, as the company closed out the errant trading positions.
The first Federal Reserve order requires JPMorgan to "take appropriate steps" to ensure that the holding company acts as a "source of strength" for its main subsidiary JPMorgan Chase Bank, NA, submit a plan to improve board of directors oversight of its risk management, audit and compliance functions, submit a new plan to make further improvements to its risk management and controls for trading activities, and a plan to "continue ongoing enhancements" to the company's Chief Investment Office, which is the group that caused the hedge trading losses last year.
The second order requires the company to submit a plan to improve its compliance with the Bank Secrecy Act and anti-money laundering requirements.
Although the orders were expected to be handed down late Monday, JPMorgan Chase's shares were down less than 1% to close at $45.88. The shares were down a bit more in aftermarket trading soon after the Federal Reserve's announcement, to $45.72.
Tech News Dominates
The broad indexes ended mixed, with the action dominated by technology names, after the Wall Street Journal reported on Sunday that Apple (AAPL) had reduced its orders for iPhone 5 components amid slower-than-expected demand, citing unnamed sources. Apple's shares were down 4% to close at $501.75. The company will announce its results for its fiscal 2013 first quarter (ended on Dec. 31) on Jan. 23, with analysts polled by Thomson Reuters expecting earnings to come in at $13.34 a share, declining from $13.87 a year earlier.