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Thursday, January 15, 2009

Stocks Sink as BofA Pleas for more money

NEW YORK (Reuters) - Stock index futures fell on Thursday as persistent worries about mounting credit losses in the financial sector overshadowed reassuring results from JPMorgan Chase (NYSE:JPM - News).

Although JPMorgan's fourth-quarter profit slid 76 percent from a year earlier as the bank wrote down bad loans and set aside money to cover mounting credit losses, the results were not as bad as expected.

The company's underlying performance suggested that the No. 2 U.S. bank was navigating the financial crisis with more success than its rivals, analysts said.

"Most people consider them to be perhaps the strongest bank out there. They really have battled to be profitable," said Rick Meckler, president of investment firm LibertyView Capital Management in New York, adding:

"So it doesn't speak well of those that are not in good shape. The initial reaction was very positive, but now people are starting to consider what the outlook is for those banks that are not nearly as well positioned. We are not out of the woods at all."

S&P 500 futures shed 7.60 points and were below fair value, a formula to evaluate pricing taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 69 points while Nasdaq 100 futures slipped 15.50 points.

Shares of JPMorgan rose 3.5 percent in volatile trade to $26.81 before the bell.

Bank of America (NYSE:BAC - News) shares fell 7.2 percent to $9.47 following news that the largest U.S. bank, is close to getting billions of dollars more in federal support from taxpayers.

Shares of Apple Inc (NasdaqGS:AAPL - News) were set to drag on Nasdaq after the iPod and iPhone maker said Chief Executive Steve Jobs had decided to take a leave of absence due to health issues. The stock was off 6.8 percent to $79.50 before the bell.