NEW YORK-JP­Mor­gan's sur­prise US$2 bil­lion trad­ing loss prompt­ed a sell-off in fi­nan­cial stocks Fri­day, with small­er de­clines across the broad­er mar­ket as in­vestors de­cid­ed this was more of a prob­lem for in­vest­ment banks than for oth­er in­dus­tries. Most of the 10 in­dus­tries in the Stan­dard & Poor's 500 in­dex were flat or post­ed mod­est de­clines; fi­nan­cial stocks fell 1.1 per cent.

For that, the oth­er in­vest­ment banks could thank JP­Mor­gan, Amer­i­ca's biggest bank. The stock plunged 9.3 per cent, drag­ging oth­er banks with big Wall Street op­er­a­tions down with it. Mor­gan Stan­ley fell 4.2 per cent and Gold­man Sachs fell 3.9 per cent. Cit­i­group fell 4.2 per cent. Re­tail-fo­cused banks fared bet­ter. Wells Far­go edged up 0.4 per cent.

JP­Mor­gan's blun­der comes in the midst of a po­lit­i­cal bat­tle over how close­ly to reg­u­late banks, though JP Mor­gan's CEO Jamie Di­mon said the trades would not have been af­fect­ed by the so-called Vol­ck­er rule, ex­pect­ed to take ef­fect this sum­mer. Still, the USUS$2 bil­lion loss is sure to be used as am­mu­ni­tion by those push­ing for tighter reg­u­la­tion of in­vest­ment banks.

"It'll def­i­nite­ly have a po­lit­i­cal im­pact," said Randy War­ren, chief in­vest­ment of­fi­cer for War­ren Fi­nan­cial Ser­vice. The Dow Jones in­dus­tri­al av­er­age fell 34.44 points to close at 12,920.60. It had waf­fled around with small gains and loss­es through­out most of the day be­fore set­tling in­to the red in the af­ter­noon.

The Stan­dard & Poor's 500 in­dex fell 4.60 points to close at 1,353.39. The Nas­daq com­pos­ite in­dex, which is heav­i­ly weight­ed with tech­nol­o­gy stocks, was up 0.18 points to 2,933.82. Mi­crosoft and In­tel both rose 1.4 per cent af­ter In­tel told an­a­lysts that it is on track to meet sales ex­pec­ta­tions.

Tech in­vestors were re­lieved to hear that one day af­ter Cis­co Sys­tems prompt­ed sell­ing in tech shares by be­ing pes­simistic about sales. Semi­con­duc­tor mak­er Nvidia jumped 6.4 per cent af­ter re­port­ing rev­enue that was high­er than an­a­lysts were ex­pect­ing.

Some con­sumer dis­cre­tionary stocks did well, with re­tail­er Bed Bath & Be­yond jump­ing 4.1 per cent, one of the biggest gains in the S&P 500 in­dex, and video stream­ing and DVD-by-mail com­pa­ny Net­flix rose 6.9 per cent.