JPMorgan will release third-quarter earnings on Friday. (Spencer Platt/Getty Images )
The scars from JPMorgan Chase & Co.'s whopping trading losses have healed -- at least in its stock price.
Five months after the bank disclosed a trader nicknamed the "London Whale" lost billions in risky derivatives bets, its stock has recovered from a sharp dive.
At $41.77 a share Wednesday, JPMorgan's stock was $1.13, or 3%, higher than it was on May 10, when the company revealed the bad bets.
The bank's stock gained another 57 cents, or 1%, to $42.34 in early trading Thursday.
When JPMorgan announces third-quarter earnings Friday, it is expected to update investors and analysts on its progress unwinding the "London Whale" trades. Initially estimated at $2 billion, the bank has said the losses widened to $5.8 billion and could grow by another $1.7 billion in a worst-case scenario.
Stock price aside, JPMorgan has not put the episode behind it. The bank's outspoken and savvy chairman and chief executive, Jamie Dimon, was put on the defensive, and his reputation as Wall Street's spokesman in Washington was tarnished.
A shake-up continues at the bank. The Wall Street Journal reported late Wednesday JPMorgan's chief financial officer, Douglas Braunstein, will step down in the next six months. His would be the highest-level reassignment following the trading losses.
Meanwhile, federal investigators have been probing the loss and how the bets were recorded. The New York Times reported Wednesday the FBI could make arrests in the case over the "next several months."
JPMorgan is also dealing with a separate mortgage-fraud lawsuit, filed last week by the New York attorney general, related to Bear Stearns. JPMorgan bought the troubled bank during the financial crisis.
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