Stocks plummet on JPMorgan results, consumer news

U.S. stocks slid, sending the Standard & Poor's 500 Index to its biggest drop in a month, as JPMorgan Chase & Co. reported a loss in retail banking, consumer confidence trailed forecasts and a stronger dollar weighed on commodity prices.

JPMorgan, the first of the largest U.S. banks to report fourth-quarter results, tumbled 2.3 percent after also increasing provisions for credit losses and reporting revenue that trailed analysts' average estimate. General Electric Co. and AT&T Inc. dropped after the Reuters/University of Michigan preliminary index of consumer sentiment rose to 72.8 in January, missing the median economist estimate of 74.

"Investors want to see consumer spending and real revenue growth," said Malcolm Polley, chief investment officer at Stewart Capital Advisors in Indiana, Pennsylvania, which manages $1 billion. "Financials will continue to be the focus. If banks are not able to reasonably expand their balances sheets, the economy will not be strong enough to fuel spending."

The Standard & Poor's 500 Index lost 1.1 percent to 1,136.03 at 4:03 p.m. in New York, the biggest drop since Dec. 17. The Dow Jones Industrial Average tumbled 100.9 points, or 0.9 percent, to 10,609.65. About four stocks fell for each that gained on the New York Stock Exchange. The market will be closed on Jan. 18 for Martin Luther King Day.

Today's decline erased a weekly gain for the S&P 500 and left the benchmark index for U.S. stocks down 0.8 percent over the past five days. The index has surged 68 percent since March 9, closing at a 15-month high yesterday, amid record-low interest rates and about $12 trillion committed by governments worldwide to stimulate the economy.

CPI, Empire FedEquities retreated even as reports showed manufacturing in the New York area grew more than estimated and the cost of living slowed, indicating the economic recovery is showing few signs of stoking inflation. The Federal Reserve Bank of New York's general economic index rose to 15.9 from 4.5 in December, while the Labor Department said the consumer-price index increased 0.1 percent last month."CPI numbers gave an indication that the economy is growing with little inflation," said Michael Holland, who oversees more than $4 billion as chairman of Holland Co. in New York. "That means interest rates won't be raised any time soon. But the market still wants to see corporate sales growth. If that doesn't happen, we would have a big headwind for stocks."JPMorgan ResultsJPMorgan slipped $1.01 to $43.68 in New York trading. The largest U.S. bank by market capitalization reported fourth- quarter revenue of $25.24 billion, less than the average estimate of $26.21 billion in a Bloomberg survey. The loss in the retail bank was the first since the first quarter of 2008, and the company boosted loss reserves for consumer loans by $1.9 billion, bringing the total to $32.5 billion.Financial shares in the SP 500 slid 2 percent for the biggest drop among 10 groups.Morgan Stanley lost 2.6 percent to $30.38. Bank of America Corp. declined 3.3 percent to $16.26. Citigroup Inc. retreated 2.6 percent to $3.42. Goldman Sachs slid 2 percent to $165.21.Fifth Third Bancorp slumped 3.5 percent to $11.36. Ohio's largest lender was cut to "neutral" from "outperform" by Robert W. Baird Co., which said the stock already reflects the company's earnings potential.Capital RulesCredit Suisse Group AG's U.S. shares declined 5.1 percent to $50.64. The lender and fellow Swiss bank UBS AG may have lost as much as 14 billion Swiss francs ($13.6 billion) in assets through an Italian tax amnesty, Morgan Stanley estimated. Separately, the Organization for Economic Cooperation and Development said Swiss regulators ought to speed up the implementation of capital rules for financial institutions. UBS's U.S. shares retreated 4 percent to $15.66.Combined earnings for SP 500 companies surged 67 percent during the fourth quarter, according to a Bloomberg survey of analysts, following a record nine-quarter slump in profits. Sixty-five companies in the SP 500 were scheduled to release results next week.Energy and raw-materials shares fell as the dollar climbed, curbing demand for commodities as an alternative investment. The Reuters/Jefferies CRB Index of commodities fell 1.1 percent as the Dollar Index, which gauges the currency against six major trading partners, climbed 0.6 percent to 77.204 for its biggest gain in a month.Exxon Mobil Corp., the largest energy company, lost 0.8 percent to $68.11. Newmont Mining Corp., the biggest U.S. gold producer, dropped 1.7 percent to $47.61.JJ, Sallie MaeJohnson Johnson slid 0.8 percent to $64.56. The world's largest maker of health-care products expanded its recall of items possibly tainted with a wood chemical to include Rolaids, Motrin, Children's Tylenol and St. Joseph's Aspirin. Separately, the U.S. said today in a lawsuit that Johnson Johnson paid kickbacks to Omnicare Inc. to push prescriptions for its antipsychotic drug Risperdal for elderly patients.SLM Corp. fell 6.7 percent to $10.75. Keefe, Bruyette Woods estimated the biggest U.S. student lender may pay as much as $267 million, or about 57 cents a share, under President Barack Obama's proposed tax on financial firms to recover the costs of bailing out the industry.Con-way Inc. dropped 4.1 percent to $31.48. The second- largest U.S. trucking company was downgraded to "neutral" from "overweight" at JPMorgan by equity analyst Thomas Wadewitz.Toll Brothers Inc. lost 2 percent to $19.34. The nation's largest luxury homebuilder was downgraded to "neutral" from "buy" by Goldman Sachs.Kraft GainsKraft Foods Inc. had the biggest gain in the Dow, rising 1.6 percent to $29.58. William Ackman's Pershing Square Capital Management LP bought a 2 percent stake in the food company and is urging management to pursue a bid for Cadbury Plc that minimizes the stock component of the offer.Industrial production in the U.S. rose in December for the fifth time in past six months, propelled by a jump in utility use as temperatures turned unseasonably cold. Output at factories, mines and utilities climbed 0.6 percent for a second month, matching the median forecast of economists surveyed by Bloomberg News, figures from the Federal Reserve showed today in Washington. Manufacturing dropped 0.1 percent as losses in auto and mineral production overshadowed gains in business equipment.Economists at JPMorgan today raised their forecast for growth in U.S. gross domestic product for the fourth quarter to 5.7 percent from 4.5 percent.The update reflects "a quicker turn in the inventory cycle," Bruce Kasman, the bank's chief economist, said in a note to clients. Kasman anticipates the world's largest economy will grow at a 3 percent annual pace in the first three months of this year.