June 28 - Summary of business headlines: Research in Motion posts big loss; Investors react negatively to surprise health care ruling; JPMorgan Chase trade damage could grow-source; Consumer spending slows. Bobbi Rebell reports.
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Research in Motion reporting a huge $192 million fiscal first-quarter loss after the closing bell. The BlackBerry maker says shipments for its smart phones fell sharply for the second straight quarter and that it will cut 5,000 jobs. It is also delaying the launch of its next generation phone until early next year.
Investors caught off guard by the Supreme Court ruling, which upheld a key part of President Obama's healthcare overhaul. It requires Americans to get health insurance by 2014 - or face a penalty.
Shares of insurance companies were under pressure- because of concerns about how much the ruling could cost their bottom lines:
Jeffrey Kraws of Crystal Research:
SOUNDBITE: JEFFREY KRAWS, CEO, CRYSTAL RESEARCH (ENGLISH) SAYING:
"In the insurance sector right now the insurance companies are picking up 30 plus million people who previously weren't included in their coverage. For them unfortunately you are going to have a lot of people who have pre-existing conditions who are very expensive to them that they have to now pick up and cover for a very small premium."
The court did strike down the requirement that states dramatically expand Medicaid health insurance for the poor.
Banks getting hit hard. JPMorgan Chase will likely lose between $4 and $6 billion on its botched trade according to a person familiar with the matter. That is two to three times the original estimate. The source also said JPMorgan has exited more than half its losing position.
U.S. consumer spending still sputtering. The commerce department confirmed the economy grew at an annual pace of 1.9 percent in the first quarter of the year. But consumer spending, which is 70 percent of U.S. economic activity - grew at a lower rate than previously reported.
A separate report showed fewer Americans filed for jobless claims last week.
In the end it was a losing day on Wall Street; all the major indexes closing to the downside.
In Europe, shares closed lower, dragged down by Barclays. Its stock down 15 percent after the bank agreed to pay $453 million dollars to settle allegations it manipulated key interest rates.
Bobbi Rebell, Reuters.
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