- NEW YORK (Reuters) - J.P.
Morgan Chase & Co. Inc. (JPM) said on Thursday that rumors it had suffered
large losses on gold trades were ``false and irresponsible,'' but the speculation
damaged its stock price.
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- J.P. Morgan shares, a component of the benchmark Dow
Jones Industrial Average, were down 7 percent, or $1.53 a share, at $20.53.
The stock fell on rumors arising in Europe that the No. 2 U.S. banking
company had lost between $17 billion and $70 billion on gold trades. A
spokesman denied the rumors and analysts also discounted them.
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- ``It's (circulated) at least three or four times this
year, and it's always out of Europe,'' UBS Warburg analyst Diane Glossman
said of the rumor. ``They should please come up with something more creative
next time than recycling old rumors.''
-
- Other analysts also downplayed the rumors, saying investors
might be taking profits after the U.S. Federal Reserve interest rate cut
on Wednesday.
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- ``I think most of this move is profit taking,'' Fox-Pitt,
Kelton analyst Reilly Tierney said. ``I just don't think there's a lot
to it,'' he said of the rumors.
-
- Tierney also said concerns about the bank's exposure
to energy merchants could be hurting the stock. Debt rating agency Standard
& Poor's said on Wednesday U.S. energy merchant companies have more
than $90 billion in medium-term debt to refinance over the next four years,
with a large portion of maturating debt originally financed in the bank
market. But Tierney said he doubted this would hurt J.P. Morgan stock a
day after the S&P report's release.
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- Gold analysts in London also said market concerns were
overblown.
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- ``There have been issues over JP Morgan's gold derivative
business over many months but nothing on the scale to scare the market,''
said one London-based gold analyst.
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