JP Morgan Chase (NYSE:JPM) reported third quarter results today. Though EPS at $1.02 beat analyst expectations by a handy $0.08, and revenue at $24.4 billion beat estimates by $700 million, income declined by 4% in the quarter.

This provided the impetus for bears to hammer financial stocks (NYSE:XLF) including regional banking (NYSE:KRE) stocks. Stocks such as First Midwest Bancorp (NASDAQ:FMBI), Zions Bancorporation (NASDAQ:ZION), Regions Financial Corporation (NYSE:RF), and Wintrust Financial Corporation (NASDAQ:WTFC) fell 4-10%.

Don’t Miss: JPM Earnings Are This Ugly Without Accounting Tricks.

In today’s conference call Jamie Dimon,  JP Morgan’s (NYSE:JPM) CEO, expressed worries about the Volcker Rule (a rule soon to be implemented and intended to limit big banks’ speculative proprietary derivatives and stock investments). Dimon claimed the rule was highly restrictive in its provisions relating to market-making and that U.S. banks could be “strangled”.

On a positive note, he announced JP Morgan (NYSE:JPM) added 13,000 jobs in the U.S. in the past year, but these were not in the investment banking business — where in fact the bank intends to cut 1,000 jobs in the forthcoming half year. His opinion on the U.S. economic recovery was “it hasn’t really strengthened, but it’s still here.” CFO Braunstein was, however, gung-ho about the bank’s improving commercial loans, but expressed caution on the residential home loans front.

JPM was the first financial major to report results, and will be followed by Citigroup (NYSE:C), Bank of America (NYSE:BAC), and Goldman Sachs (NYSE:GS) next week.  According to Marc Pado, U.S. market strategist at Cantor Fitzgerald “this is a very important quarter for earnings, as it will cause many bearish economists to upgrade forecasts for 2011 expectations.”

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