* JPMorgan drops on Senate report, Fed findings
* S&P 500 hovers 6 points below record closing high
* Dow off 0.3 pct, S&P 500 off 0.3 pct, Nasdaq off 0.4 pct
By Angela Moon
NEW YORK, March 15 U.S. stocks edged lower on
Friday, weighed by a decline in JPMorgan Chase shares after the
bank was hit by a one-two punch of bad news and as investors
paused just below the S&P 500's record high.
The widely watched index was about 6 points away from its
record closing high of 1,565.15, set in October 2007, after
failing to break above that level on Thursday.
Friday's dip also meant the Dow was on track to snap its
10-day winning streak during which it racked up a series of
all-time highs. Equities have rallied since the start of the
year on signs of improvement in the economy and supported by the
Federal Reserve's efforts to bolster the recovery.
"It seems like the market is digesting some of the rally
that we have seen so far, but when we reflect on the current
valuation which is 13 1/2 times earnings on a forward looking
basis, it is still a comfortable level compared to around 20 in
2007 and 29-30 levels in 2000," said David Lyon, Investment
Specialist, J.P. Morgan Private Bank, based in San Francisco.
JPMorgan Chase & Co was the biggest drag on the S&P
500 and one of the biggest weights on the Dow, falling 2.2
percent to $49.87.
The Federal Reserve told JPMorgan and Goldman Sachs Group
Inc that they must fix flaws in how they determine
capital payouts to shareholders, though the central bank still
approved their plans for share buybacks and dividends.
A Senate report alleged that JPMorgan had ignored risks,
misled investors, fought with regulators and tried to work
around rules as it dealt with mushrooming losses in a
derivatives portfolio. A former top JPMorgan official told
lawmakers on Friday she was not to blame for the losses.
In contrast, Goldman shares recovered from early weakness to
gain 0.3 percent to $154.58. The stock of rival Bank of America
rose 3.9 percent to $12.58. The S&P financial sector
index edged up 0.3 percent.
The Dow Jones industrial average was down 49.40
points, or 0.34 percent, at 14,489.74. The Standard & Poor's 500
Index was down 4.96 points, or 0.32 percent, at
1,558.27. The Nasdaq Composite Index was down 13.44
points, or 0.41 percent, at 3,245.49.
Shares of CenterPoint Energy and OGE Energy Corp
jumped after the companies, along with ArcLight Capital
Partners LC, agreed to combine some of their operations to form
an energy transportation and services company with nearly $11
billion in assets.
CenterPoint climbed 8 percent to $23.58, and OGE gained 9.4
percent to $67.12.
Market volatility may be increased due to 'quadruple
witching' - the quarterly settlement and expiration of four
different types of March equity futures and options contracts.
Expiration can lead to greater volume and volatility as players
adjust or exercise derivatives positions.
Data from Thomson Reuters' Lipper service showed investors
in U.S.-based funds poured $11.26 billion of new cash into stock
funds in the latest week, the most since late January.
A busy day of economic reports reinforced investors' view
that the economic recovery has momentum to it. Manufacturing
output bounced back in February, though the pace of
manufacturing growth in New York state cooled slightly in March
and consumer sentiment fell.
The S&P 500 retail sector was down 0.9 percent
after the sentiment data.
Consumer prices registered their biggest increase in nearly
four years as the cost of gasoline rose. But a smaller gain in
the core U.S. Consumer Price Index, which excludes volatile food
and energy prices, left the door open for the Federal Reserve to
continue its bond-buying program, which has contributed to the
stock market's rally.