Stocks mostly down as markets react to JPMorgan

U.S. stocks mostly fell Friday to a second weekly decline as a rise in consumer sentiment failed to outweigh JPMorgan Chase & Co.’s $2 billion trading loss.

Down 1.7 percent for the week, the Dow Jones Industrial Average fell 34.44 points, or 0.3 percent, at 12,820.60, with JPMorgan its heaviest weight, off 9.3 percent.

Jamie Dimon, JPMorgan Chase’s chief executive, called the losses “self-inflicted” in revealing them late Thursday.

“The JPMorgan thing has leveled off. Like anything else, it will blow over. It’s the strongest bank by far, and $2 billion is a big deal, but we’ll weather this very easily,” said Chip Cobb, portfolio manager at BMT Asset Management.

The revelation by one of the country’s largest banks “raises a new round of questions about bank proprietary trading,” Fred Dickson, chief investment strategist at Davidson Cos., wrote in emailed comments

It also puts “a handful of banks in the penalty box until the next round of quarterly results hit the tape in two months,” Dickson added.

The S&P 500 Index shed 4.60 points, or 0.3 percent, at 1,353.39,.

The Nasdaq Composite Index managed a fractional gain to close at 2,933.82, off 0.8 percent decline from last Friday’s close.

Drop in gas prices appears to boost consumer sentiment

Consumer sentiment edged higher in May to the best reading since the recession, as declining gasoline prices appear to have offset slowing job-markets growth.

The preliminary reading of the University of Michigan-Thomson Reuters index rose to 77.8 from 76.4 in April. That’s the best reading since January 2008 – just one month after the recession started.

The current economic conditions index jumped to 87.3, the best reading since January 2008, from 82.9 in April.

The index of consumer expectations actually fell, falling to 71.7 from 72.3 in April.

That picture could be explained by the combination of falling gasoline prices, which impact the current situation, and April’s report of slowing jobs growth, which could be weighing on expectations.

Items with lithium batteries banned in overseas mail

The U.S. Postal Service is banning international shipments of electronics with lithium batteries such as smartphones, laptops and iPads, citing the risk of fire.

Beginning Wednesday, consumers may no longer make the shipments, including to army and diplomatic post offices. That means friends and family will have to use more expensive private companies such as UPS and FedEx to ship electronics to U.S. troops based abroad.

The Postal Service cited discussion by the International Civil Aviation Organization and the Universal Postal Union. They issue semi-binding guidelines for global trade.

Officials expect that U.S. consumers can resume shipments in most cases after Jan. 1, once the agency develops a new policy “consistent with international standards.”

Lithium batteries are believed to have caused at least two fires on cargo planes since 2006.

— From news service reports