U.S. Stocks Push to Session Highs; DJIA Up 202 -- FEC

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Date Posted: 02:41:28 07/14/12 Sat
Author: US Stocks Rally After J.P. Morgan's Results Top Expectations (KellyClarkson/Sidewalk)
Subject:

U.S. Stocks Push to Session Highs; DJIA Up 202

US Stocks Rally After J.P. Morgan's Results Top Expectations
14/07/2012 12:23AM

--Stocks higher after J.P. Morgan earnings top expectations

--J.P. Morgan Chase shares rise after 2Q results top estimates

--China 2Q growth slowest in three years, but matches expectations

By Chris Dieterich

NEW YORK--Bank stocks jumped after better-than-forecast quarterly results from J.P. Morgan Chase, snapping the Dow Jones Industrial Average out of its longest slump in nearly two months.

The Dow Jones Industrial Average rallied 147 points, or 1.2%, to 12720 in recent trading. The Standard & Poor's 500-stock index advanced 16 points, or 1.2%, to 1350, and the Nasdaq Composite Index tacked on 29 points, or 1%, to 2895.

Financial-sector stocks recently led all 10 of the S&P 500's sectors higher after J.P. Morgan and Wells Fargo reported earnings. Shares of J.P. Morgan rose 3.5% after the banking giant reported that second-quarter earnings fell 8.7% from a year earlier, but those results exceeded expectations. Investors were watching closely to gauge the impact of soured outsize bets on certain corporate credit indexes. The bank also said it would reduce its previously reported first-quarter results by $459 million.

Wells Fargo gained 1.3% after reporting a 17% rise in second-quarter profit, as income in the bank's mortgage-banking business climbed.

Fellow bank and Dow component Bank of America rose 2.6%. Elsewhere in the sector, Citigroup advanced 2.9%, Goldman Sachs rose 2.8% and Morgan Stanley added 1.6%.

Investors shrugged off July's preliminary reading for the Thomson Reuters/University of Michigan consumer sentiment index, which was lower than expected.

In other U.S. economic news, wholesale prices in June rose for the first time in four months, exceeding expectations, as rising prices for light trucks and food more than offset falling energy costs.

Earlier, investors had looked to China for a reading on second-quarter growth. While growth in the world's second-largest economy decelerated to its slowest pace since the global financial crisis, the reading matched expectations, easing pressure across global markets.

"On China, people have spent a lot of time with worries about the worst possible outcomes, particularly the European slowdown's impact on domestic consumption, and it looks like that's not playing out as badly as some feared," said Andrew Wilkinson, chief economic strategist at Miller Tabak.

"There's been a heck of a lot of panic before the report, and the market is a bit comforted," Mr. Wilkinson said.

European markets were mostly higher, with the Stoxx Europe 600 up 0.7%, amid relief over China's economic reading and solid demand at an Italian bond auction.

Asian markets were mostly higher following China's economic report. China's Shanghai Composite inched up less than 0.1% while Japan's Nikkei Stock Average added 0.1% and Hong Kong's Hang Seng index gained 0.4%.

Lexmark International dropped 8.2% after the maker of printing and imaging products lowered its outlook for second-quarter earnings, citing weaker-than-anticipated demand, particularly in Europe.

The U.S.-listed shares of Box Ships slid 18% after the Greece-based shipping company said it plans a public offering of $30 million worth of its common stock.

Commodities prices were mostly higher. Crude-oil futures climbed 0.8% to $86.72 a barrel, while gold futures gained 1.8% to $1,593 a troy ounce. The U.S. dollar fell against the euro and the yen. The yield on 10-year U.S. Treasury bonds inched higher to 1.500% as demand fell.

Write to Chris Dieterich at christopher.dieterich@dowjones.com

(END) Dow Jones Newswires

July 13, 2012 10:23 ET (14:23 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

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