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May 14, 2012 at 8:56 PM   |   0 comments

Markets close on downside

NEW YORK, May 14 (UPI) -- U.S. stock indexes followed European markets lower Monday, with investors reacting to recent elections in Greece, France and Germany.

By close of trading in New York, the Dow Jones industrial average lost 125.25 points or 0.98 percent to 12,695.35.

The Nasdaq composite index gave up 31.24 points or 1.06 percent to 2,902.58.

The Standard & Poor's 500 index lost 15.04 points or 1.11 percent to 1,338.35.

On the New York Stock Exchange, 481 stocks advanced and 2,608 declined on a volume of 3.4 billion shares traded.

The benchmark 10-year treasury note gained 19/32 to yield 1.781 percent.

The euro fell to $1.2836 from Friday's $1.2917. Against the yen, the dollar fell to 79.86 yen from 79.94 yen.

In Tokyo, the Nikkei 225 index added 0.23 percent, 20.53, to 8,973.84.

In London, the FTSE 100 index lost 1.97 percent, 110 points, to 5,465.52.

Election results have undermined years of work turning much of Europe toward financial discipline as the primary focus of economic strategies.

With several countries already suffering from prolonged recessions, voters are turning out advocates of austerity budgets in favor of politicians who pledge to put job creation in front of debt reduction.

But the debt crisis still looms large. Late last week, Spain ordered its banks to raise $39 billion to cushion themselves against further losses.


Ina Drew retires from JPMorgan

WASHINGTON, May 14 (UPI) -- U.S. bank JPMorgan Chase said Chief Investment Officer Ina Drew is retiring in the wake of trading bets that lost at least $2 billion.

The bank said Drew, one of the most successful women on Wall Street, was retiring after 30 years with the firm. She would be replaced by Matt Zames, co-head of Global Fixed Income in the Investment Bank and head of Capital Markets.

Daniel Pinto, currently co-head of Global Fixed Income will operate that division solo, the bank said.

In Washington, White House press secretary Jay Carney said President Barack Obama was among those who thought the losses at the bank, which occurred over a 15-day trading period, validated the call for tougher bank regulations.

"As you know, the president fought very hard against Republicans and Wall Street lobbyists to get Wall Street reform passed," Carney said.

"He fought very hard to ensure that the Volcker Rule (limiting or banning proprietary trading) was part of it, against a concerted effort to prevent that from happening," Carney said.

JPMorgan Chase's top officer said Sunday the U.S. investment bank would bounce back quickly the loss that sent its shares plummeting.

Chief Executive Officer James Dimon said on NBC's "Meet the Press" the company was enjoying an overall good quarter and was tightening up its operations to prevent such shocks in the future.

"The company is going to earn a lot of money this quarter," Dimon said, "so it's a very strong company. We made a terrible, egregious mistake and there's almost no excuse for it."

The mistakes cost JPMorgan Chase at least $2 billion outright and also led to a downturn in its stock price that the Wall Street Journal said amounted to more than $14 billion.

The Journal said the investigation into the pratfall has currently focused on a London trader, who thus far has not been branded a rogue operating outside company rules.

In a statement, Dimon said, "Ina Drew has been a great partner ... despite recent losses in the CIO [chief investment office]."

He also said Zames was "a world-class risk manager and executive -- highly regarded for his judgment and integrity."


Yahoo!'s former CEO diagnosed with cancer

SUNNYVALE, Calif., May 14 (UPI) -- U.S. search engine firm Yahoo! Inc. announced a board shake-up following discovery its chief executive officer's resume was falsified.

The company did not mention its former CEO Scott Thompson's health. The Wall Street Journal reported Monday sources said Thompson had been diagnosed with thyroid cancer.

The diagnosis had just been discovered "in recent days," the Journal reported.

The scandal erupted May 4 when activist investor Daniel Loeb, a founder of Third Point, revealed it had checked Thompson's posted resume, which included a college degree in computer science he had never received.

Yahoo! said Sunday Thompson had already left the company. He was replaced by Ross Levinsohn on an interim basis. Non-executive Chairman Roy Bostock had also stepped down, replaced by Fred Amoroso, the company said.

Bostock left to facilitate a smoother transition period, as the company also reached an agreement with Third Point, which had been lobbying to have four hand-picked candidates, including Loeb, placed on the board.

Yahoo! agreed to have three of Third Point's candidates take seats on the board. Concurrently, five board members who had already decided not to seek re-election at the company's next shareholder meeting agreed to step down effective immediately.

Thompson had spent a week doing damage control, sending an apologetic memo to employees for the distraction but it did not save his job.


Retailer fires CFO for social media leak

HOUSTON, May 14 (UPI) -- U.S. clothing and accessories seller Francesca's said it had fired Chief Financial Officer Gene Morphis for sharing company information on social Web sites.

The company said it had investigated Morphis' behavior with help from an outside counsel and "found that he improperly communicated company information through social media."

The firm said it was already searching for a new CFO with the firm's controller, Cynthia Thomassee, serving as interim CFO until a more permanent replacement is found.

"We are disappointed by this situation but we expect our executives to comply with all company policies. We acted immediately on Friday afternoon when we first became aware of the matter and have moved swiftly to replace Mr. Morphis based on the findings of the investigation," said Chairman of the Board Greg Brenneman.

The company did not reveal what information Morphis had shared or name the social media Web site he used to disclose it.

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