Tuesday, June 26, 2012
JPMorgan Chase & Co.(NYSE:JPM) Rebounds After recent fall
Shares of JPMorgan Chase & Co.(NYSE:JPM) bounced back by 1.50% to $35.85 on Tuesday after falling in the past few weeks.
U.S. bank stocks posted solid gains last Friday, despite Moody's Investors Service cutting the credit ratings of 15 banks globally. "It's been like a cloud over the sector," said Brian Gendreau, market strategist at Cetera Financial. "And look at who's going up: bank stocks. There are obviously some people who thought it would be much worse."
JPMorgan Chase & Co.(JPM) and Goldman Sachs Group Inc. compete for banking and trading business from almost all of the world’s largest companies, with one notable exception: Chesapeake Energy Corp. (CHK), the second biggest U.S. gas producer now facing a cash-flow (CHK) shortage.
For more than a decade, JPMorgan bankers have declined to do business with Chesapeake and its chief executive officer, Aubrey McClendon, 52, said people with knowledge of the matter. In contrast, Goldman Sachs, which once loaned money to McClendon against his wine collection, recently helped arrange a $4 billion loan for Oklahoma City-based Chesapeake and is advising on its efforts to sell assets.
JPMorgan, the biggest U.S. lender by assets, is missing out on a shot at hundreds of millions of dollars in fees paid to banks over the years by Chesapeake, one of the energy industry’s most active dealmakers. Avoiding Chesapeake also limits JPMorgan’s risk (JPM) should the gas company’s finances worsen.
Concerns about Chesapeake’s fast growth and credit quality (CHK) played a role in JPMorgan’s decision not to pursue business from the energy firm, said the people, who asked not to be identified because the discussions were private. Competition is already fierce and other banks have an edge, reducing the attractiveness of pursuing Chesapeake work.