By Michael P. Regan and Rita Nazareth Bloomberg News
NEW YORK - U.S. equities rose, trimming a weekly loss, as an unexpected increase in consumer confidence and rally in technology shares overshadowed JPMorgan Chase & Co.’s $2 billion trading loss.
Treasuries headed for the longest run of weekly increases since Russia’s 1998 default.
The Standard & Poor’s 500 Index increased 0.3 percent to 1,362.26 at 11:54 a.m. in New York after retreating as much as 0.7 percent. Gains in 10-year Treasury notes sent yields down two basis points to 1.85 percent, poised for an eighth weekly decline. The S&P GSCI Index of commodities fell for an eighth day, its longest slump since December 2008.
The Thomson Reuters/University of Michigan preliminary index of sentiment climbed to a three-year high of 77.8, helping stocks recover from an early slump led by banks following what JPMorgan Chief Executive Officer Jamie Dimon called an “egregious” failure in trading of synthetic credit securities. Nvidia Corp. jumped 8.8 percent as its sales forecast topped estimates amid demand for graphics and cell-phone chips.
“The U.S. economy is doing OK, corporate earnings continue to impress, but there’s a lot of headline risk in financials,” Stephen Wood, the New York-based chief market strategist for Russell Investments, said in a telephone interview. His firm oversees $140.8 billion. “There will be volatility.”
The S&P 500 trimmed its weekly loss to less than 0.3 percent. Technology shares rallied 0.9 percent as a group and contributed the most to the advance as all 10 industries in the S&P 500 increased except for financial companies. Intel Corp. and Microsoft Corp. rose more than 2 percent to lead gains in the Dow Jones Industrial Average, which rose as much as 63 points.
JPMorgan pared losses after declining as much as 9.9 percent. The bank’s chief investment office, run by Ina Drew, took flawed positions on synthetic credit securities that remain volatile and may cost the lender an additional $1 billion this quarter or next, Dimon said yesterday in a conference call with analysts. The loss originated out of the firm’s London CIO unit, an executive at the bank said.
U.S. lawmakers and interest groups favoring tighter restrictions on proprietary trading said JPMorgan’s loss bolsters their case.
Senator Carl Levin, the co-author of the so-called Volcker rule and chairman of the Permanent Subcommittee on Investigations, said the disclosure served as a “stark reminder” to regulators drafting the proprietary- trading ban required by the 2010 Dodd-Frank Act.