NEW YORK (AP) -- The banking sector looked a little brighter for a second straight day Thursday after JPMorgan Chase & Co. reported better-than-expected results despite a spike in mortgage and other loan defaults.

The bank's shares gained more than 13 percent Thursday after it reported a 53 percent drop in profit. Following Wells Fargo & Co.'s stronger-than-expected results released Wednesday, investors appear more confident that the banking sector, while struggling, will be propped up by some of its healthier players.

However, JPMorgan Chase, like its weaker competitors, still has a tough environment to slog through as the aftermath of the mortgage and credit crisis continues. Even the bank's more creditworthy borrowers are now failing to make their mortgage payments -- the charge-off rate for prime mortgages, which include more than $34 billion in jumbo mortgages and $2.5 billion in alt-A mortgages, nearly doubled from the first quarter to the second, from 0.48 percent to 0.91 percent.

"They're staggering numbers. We have all the politicians telling people it's OK not to pay your mortgages," said JPMorgan Chase Chief Executive Jamie Dimon during a call with analysts. He said it's hard to predict how the prime mortgage trends will progress throughout the rest of 2008, but "our current expectation is those losses could triple from here."

Jumbo mortgages are loans that exceed the maximum set by government entities Fannie Mae and Freddie Mac, and alt-A mortgages are given to people with minor credit problems or who lack proper

Question: I’m 34 years old and have been investing 10% of my income in my 401(k) for 11 years. My balance of $160,000 is less than it was a year ago, despite continued contributions and company match. In fact, the Standard & Poor’s 500 stock index fund where I have most of my money is at or near its level when I started investing. Given inflation, dividends and the fact that I’ve been contributing steadily over time, have I made anything? Or have I been a total fool for my diligence? —Darin Knight, Vancouver, Washington

Answer: A total fool for having saved for retirement? Not in my book.

If nothing else, you’ve managed to build a nice nest egg valued at $160,000 before reaching the age of 35. If that’s being a fool, I wish the world were full of fools like you. Most people can only dream that they’d gotten the jump on retirement that you have.

That said, I can understand why you’re disappointed in your 401(k)’s performance - although you haven’t done as badly as you seem to think.

It’s true that the past decade has been a dismal one for stocks. For the 10 years to July 1, the Standard & Poor’s 500 index has gained a measly 2.9% a year, almost all of that the result of dividends. As it turns out, inflation also cruised along at an annualized rate of 2.9% a year. So the real, or inflation-adjusted, return over that period was pretty much zero.

But remember. That’s not the return you’ve earned on all the money you’ve invested in your 401(k). While the dollars you invested in your S&P 500 index fund in July, 1998 returned just 2.9%, you earned quite a

SAN FRANCISCO (AP) -- IBM Corp.'s second-quarter profit leaped 22 percent, blowing past Wall Street estimates as the technology company's bread-and-butter services division continued to thrive despite economic malaise in the U.S.

The Armonk, N.Y.-based company also raised its profit outlook for 2008, saying it expects to earn at least $8.75 per share on the year, an improvement of 25 cents per share over IBM's previous guidance.

The large jump reflects IBM's optimism that it will continue to benefit from its broad international penetration and highly profitable blend of services, software and hardware.

More than half of IBM's business comes from selling services to companies looking to cut costs or better manage their information technology infrastructure. That business has held up remarkably well for IBM despite fears that the economic downturn in the U.S. has started to pinch off corporate spending in other parts of the world.

IBM said Thursday it earned $2.77 billion, or $1.98 per share, in the three-month period ended June 30. That's 16 cents per share higher than the average estimate of analysts polled by Thomson Financial.

Last year IBM earned $2.26 billion, or $1.55 per share, for the same period.

Sales for the period jumped nearly 13 percent to $26.8 billion, about $900 million more than analysts were expecting. That revenue rise would have been just 6 percent, however, if not for weakness in the dollar

SAN FRANCISCO (AP) -- Google Inc.'s earnings growth bogged down more than investors anticipated during the second quarter, raising worries that the ailing U.S. economy is starting to touch the Internet search leader.

Although Google's management maintains the company will thrive even if the economy deteriorates further, the results released Thursday caused Google shares to plunge by about 8 percent.

The company said it earned $1.25 billion, or $3.92 per share, during the three months ended in June. That represented a 35 percent increase from net income of $925 million, or $2.93 per share, at the same time last year.

If not for costs incurred for employee stock compensation, Google said it would have earned $4.63 per share. That figure missed the average earnings estimate of $4.74 per share among analysts surveyed by Thomson Financial.

It marked just the fourth time that Google hasn't exceeded analyst expectations in its four years as a public company.

Investors expressed their dismay as Google shares plummeted $42.44, or 8 percent, in Thursday's extended trading after closing at $533.44, down $2.16.

Google's second-quarter revenue fared slightly better than earnings, rising 39 percent to $5.37 billion from $3.87 billion at the same time last year.

After subtracting commissions paid to its ad partners, Google's revenue totaled $3.9 billion -- about $30

SEATTLE (AP) -- Microsoft Corp. said Thursday its fiscal fourth-quarter profit jumped 42 percent, helped by strong sales of its Office and Windows software, but the company offered a softer-than-expected outlook for the current quarter.

Earnings for the three months ended June 30 rose to $4.3 billion, or 46 cents per share, missing Wall Street's expectations by a penny per share.

In the year-ago quarter, Microsoft reported earnings of $3.0 billion, or 31 cents per share, but the comparison isn't completely fair. Last year, Microsoft took a $1 billion charge related to defective Xbox consoles. Taking the charge into account, operating income grew 13 percent from last year.

Revenue increased 18 percent to nearly $15.8 billion from $13.4 billion last year, just ahead of Wall Street's average forecast of $15.7 billion, according to a Thomson Financial survey. The revenue rise would have been 14 percent if not for weakness in the dollar.

"Those are very good numbers for a company of our size, in what many companies are finding challenging conditions," Microsoft's chief financial officer, Chris Liddell, said in an interview.

Despite the solid results, Microsoft offered guidance short of Wall Street's expectations for the current first quarter. The company said it expects to earn 47 to 48 cents per share on $14.7 billion to $14.9 billion