Wall St cuts week’s losses with rally
NEW YORK, July 14 — US stocks rose 1 per cent on Friday as data in China allayed concerns about a further slowing of global growth and banks advanced after JPMorgan released earnings.
Shares of JPMorgan Chase & Co, the largest US bank, leapt 6.1 per cent to $36.10 after it reported a quarterly profit of nearly $5 billion despite bad derivatives bets that resulted in credit trading losses of $4.4 billion.
The bank's profit defused concerns about the long-term impact of a multibillion-dollar trading losses in the quarter.
Data showed growth in China slowed for a sixth straight quarter to 7.6 per cent, better than some in the market feared, but low enough to keep open the possibility that more action may be taken by policymakers.
Concerns about slowing growth have pressured stocks, leading to a string of losses by the S&P so far this week.
"The market was very oversold, so with China looking better than we previously thought, and JPMorgan looking like it has healed itself, things appear contained for the moment," said John Manley, chief equity strategist at Wells Fargo Funds Management in New York. "We're putting in a bottom, not a top."
The Dow Jones industrial average was up 174.75 points, or 1.39 per cent, at 12,748.02. The Standard & Poor's 500 Index was up 19.09 points, or 1.43 per cent, at 1,353.85. The Nasdaq Composite Index was up 38.47 points, or 1.34 per cent, at 2,904.66.
For the week, the S&P is down 0.1 per cent and the Dow is off 0.3 per cent. Both chalked up much steeper losses before Friday's rally. The Nasdaq is down 1.2 per cent on the week, pressured by poor outlooks from technology companies earlier in the week.
The CBOE Volatility index, Wall Street's so-called fear gauge, fell 6.7 per cent.
Stocks saw a notable jump at 10:06 a.m. (1406 GMT) as 39,345 S&P e-Mini futures contracts traded, the single busiest minute of the session so far, indicating the presence of a big buyer.
Financial stocks were the top gainers of the day, with the S&P financial index up 2.4 per cent on strong bank results.
JPMorgan said it had lost a total of $5.8 billion in 2012 from trading losse and said some traders might have tried to conceal the extent of the losses earlier this year.
The bank said it would restate its previously filed interim financial statement for the first quarter.
Shares of Wells Fargo & Co rose 3.1 per cent to $33.88 after the biggest US mortgage lender reported second-quarter earnings that beat estimates on strong mortgage banking income and improved credit quality. The KBW bank index climbed 2.6 per cent
Labor Department data showed US producer prices unexpectedly rose 0.1 per cent in June, against analyst estimates for a decline of 0.5 per cent. The market's reaction to this data was muted.
The Thomson Reuters/University of Michigan Surveys of Consumers preliminary reading on the overall index on consumer sentiment fell to 72.0 from 73.2 in June, shy of expectations as Americans took a dim view of their finances and job prospects.
Earnings season continues in full swing next week, with Intel Corp, Citigroup, Johnson & Johnson and Coca-Cola Co among the names reporting. — Reuters