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Markets lower Friday

NEW YORK, July 17 (UPI) -- U.S. markets turned lower early Friday in spite of positive news from two large banks that have struggled throughout the financial crisis.

Bank of America reported second quarter profits reached $3.2 billion, while Citigroup said profits reached $4.3 billion April through June, The New York Times reported.

Stocks slid, anyway, as a four-day run upward stalled at the opening.

In late morning trading, the Dow Jones industrial average lost 5.82 points, 0.07 percent, to 8,706. The Standard & Poor's 500 fell 0.33 percent, 3.15 points, to 937.59. The Nasdaq index shed 7.76 points, 0.41 percent, to 1,877.27.

The benchmark 10-year Treasury note fell 10/32 to yield 3.612 percent.

The euro fell to $1.4112, compared to Thursday's $1.4142. Against the yen, the dollar rose to 93.95 yen, compared to Thursday's 93.78 yen.

In Japan, the Nikkei 225 rose 0.55 percent, 51.16 points, to 9,395.32.

JPMorgan Chase eyes CIT Group

NEW YORK, July 17 (UPI) -- A JPMorgan Chase spokesman said the bank was keeping an eye on the fate of CIT Group, the struggling New York lender, as a possibility for expansion.

"It would be an opportunity for us in these states if CIT was unable to continue lending to borrowers," spokesman Tom Kelly told The New York Times Friday.

JP Morgan, along with Goldman Sachs, is now sitting at the top of the heap of financial firms, having posted a profit of $2.7 billion in the second quarter, the Times said.

The bank has been opportunistic throughout the financial crisis, taking over Bear Stearns at garage sale prices when the New York investment firm collapsed last fall and following that up with a purchase of retail bank Washington Mutual.

JPMorgan now ranks first in the world in equity and in debt capital markets, Dealogic reported.

The bank has repaid the government bailout funds it received from the Troubled Asset Relief Program. Currently, it is working on a plan to allow the U.S. Treasury Department to auction JPMorgan warrants the government bought, which would free the firm from its ties to taxpayer bailouts.

EU farm subsidies off target, some say

BRUSSELS, July 17 (UPI) -- The European Union's mammoth farm subsidy program has become sprawling and unfocused, agricultural economists said.

The $71 billion program that now subsidizes rural development and exports, also includes funding for landowners, meaning the wealthiest Europeans receive bigger subsidy checks than small farmers, The New York Times reported Friday.

A small farmer might receive a $600 subsidy, while the Queen of England last year qualified for $778,812 in subsidies to offset costs of running a 20,000-acre estate called Sandringham Farms.

Cargill, a corporation with $168 billion in revenues last year was granted $14.7 million in subsidizes from eight different European countries. Large construction firms also qualify, based on their part in rural development and Ligabue, an Italian food company that caters to the travel industry qualified, in part, for exporting coffee creamers on airlines and cruise ships.

Agricultural economists for the Organization of Economic Cooperation and Development criticized the program's support for "unintended beneficiaries." At Humboldt University in Berlin, agriculture economics professor Harald von Witzke said the program funded "big guys … that don't need it."

Economist Stefan Tangermann said families pay twice "for higher prices in the stores and for taxes that they pay out for subsidies," the Times reported.

First deflation for Canada since 1994

OTTAWA, July 17 (UPI) -- Canada posted its first deflation in June since November 1994 as consumer prices fell 0.3 percent on an annual basis, Statistics Canada reported Friday.

The decline in the Consumer Price Index was attributed to an annual decline of 19 percent in energy products, led by gasoline prices in the transportation sector, which were down 24.3 percent during the past 12 months, the agency said.

Excluding energy, the CPI rose 2.1 percent in June.

On a monthly basis, the index rose 0.3 percent from May to June, after increasing 0.2 percent from April to May, StatsCan said.

"Of the eight major components in the CPI, three recorded declines in the 12 months to June -- transportation, shelter and clothing and footwear," the report said. "The primary upward contributor on the CPI in June continued to come from higher food prices."