US stocks fell on Thursday after three days of gains as earnings from JPMorgan and soft economic data from China reinforced worries about a slowing global economy. With the S&P 500 rising six out of the last seven sessions, the index has run up 11.4 percent from an intraday low hit last Tuesday, adding to concerns the rally was overdone. The S&P has had its largest seven-day gain since March 2009 on growing optimism that European leaders were making progress in tackling the region’s debt problems.
“We’ve had a pretty decent rally from the nadir, but we can’t continue to go straight up in the absence of anything definite from Europe,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. “We’ve been rising on hope rather than anything tangible.” China’s trade surplus narrowed for a second straight month in September as both imports and exports were lower than expected, pointing to cooling domestic and global economic demand. According to a Reuters poll, analysts have reined in their expectations for U.S. economic growth, though it is still expected to pick up a notch by year-end. JPMorgan Chase & Co (JPM.N), the second-largest U.S. bank, slid 6.5 percent to $31.05 and was the biggest drag on the Dow after reporting a drop in its third-quarter net profit. The first major U.S. bank to report earnings said profits were hurt as the European debt crisis pushed investment banking clients to the sidelines. The KBW Bank index .BKX shed 4.2 percent while Bank of America Corp (BAC.N) lost 6.1 percent to $6.18.
