NEW YORK — JPMorgan Chase blew away a cloud of concern hanging over the banking industry Friday and set off a rally in stocks. Relieved investors drove up bank stocks, ended a six-day losing streak for the market and sent the Dow Jones industrial average up 204 points, the best day this month.
JPMorgan jumped 6 percent, the biggest gain in the Dow by far. The country’s largest bank earned $5 billion in the most recent quarter, easily beating Wall Street’s forecasts, even as it took a deep loss from a complex trade that went wrong. The results brightened the outlook for other major banks. If JPMorgan could sustain such a hard hit and still post stronger earnings, the thinking went, maybe others could too.
“Today is all about bank uncertainty getting resolved,” said Doug Cote, chief market strategist at ING Investment Management. “To me, that’s what is really driving the market.”
JPMorgan revealed that the loss from a derivative trade it first disclosed in May had grown to $5.8 billion, nearly triple the original estimate. Its stock shot up $2.03 to $36.07.
The bank’s underwriting business also fared better than many expected. That rubbed off on investment banks Goldman Sachs and Morgan Stanley, driving both up more than 3 percent.
The Dow gained 203.82 points to close at 12,777.09.
Wells Fargo, the other major bank reporting results Friday, said a strong pickup in lending lifted its net income 18 percent.
