The 10-Point to think to you

Kicking off the earnings season for big U.S. banks, J.P. Morgan Chase delivered a reassuring report on the state of U.S. consumers and corporations yesterday, raising hopes that strength in the economy will help banks offset weakness in their Wall Street trading businesses. Shares of the New York bank, which reported better-than-expected first-quarter profit, helped push the Dow Jones Industrial Average 1.1% higher to a new 2016 peak.

 The results could prove a turning point for financial shares, which have been a drag on the market this year. Investors shrugged off news that J.P. Morgan, Bank of America and Wells Fargo were told by federal regulators yesterday that they would have to rewrite their plans on how to handle a potential bankruptcy without taxpayer support. While regulators are right to impose rules to limit systemic risks from banks, rote adherence to “too big to fail” rules is misguided, writes our chief economics commentator Greg Ip. This morning, Bank of America said its first-quarter profit fell, hurt by a big drop in trading revenue and the drag of low interest rates.

Social Welfare

The battle over social media, a signature element of warfare in the age of technology, has emerged as a vital front against the spread of Islamic State extremism. U.S. companies such as Twitter, Facebook and YouTube, joined by online hackers and similarly minded groups, have for months aggressively battled the spread of Islamic State material online. Accounts and posts that would have stayed alive for weeks now sometimes last as little as a few hours. But Islamic State supporters, particularly on Twitter, have responded to the crackdown by opening accounts almost as quickly as gatekeepers delete them. Working around the clock, militants send tweets that swing between promises of paradise for believers and brutal death to all who oppose their brand of religiosity. We report on the decentralized media empire run by Islamic State and the efforts to shut it down.

Bad Blood

Federal health regulators have proposed banning Theranos founder Elizabeth Holmes from the blood-testing business for at least two years after concluding that the company failed to fix what regulators have called major problems at its laboratory in California. In a letter dated March 18, the Centers for Medicare and Medicaid Services said it plans to revoke the California lab’s federal license and prohibit its owners, including Ms. Holmes and Theranos’s president, Sunny Balwani, from owning or running any other lab for at least two years. That would include the company’s only other lab, located in Arizona. Under federal law, Theranos had 10 days to give CMS evidence of why the sanctions shouldn’t be imposed. The company has responded, and CMS is reviewing the response. If CMS decides to proceed with the sanctions, an appeals process could take months. Such appeals have rarely succeeded in the past.

Fare Deals

If you’re planning a multicity tour, be careful how you book. The three biggest airlines in the U.S. have blocked their cheapest prices on flights from being used on many connecting and multicity trips. Previously, reservation computers would find the lowest price for each flight in an itinerary and add them up to one price for the trip. Now, under new pricing rules at American, Delta and United, the cheapest prices can’t be combined. Airlines say they have been putting lots of deeply discounted fares into regional markets and are trying to recapture fares on routes they never intended to discount. Travel agents say the savings from buying multiple one-way tickets far outweigh the potential pitfalls, and they’re now scrambling to adjust to the new airline pricing setup.
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