Stocks higher after robust bank earnings

By NBC News wire services

Updated at 9:37 a.m. ET: Stocks advanced Friday, indicating the S&P 500 may crimp its worst weekly decline since early June, following a robust earnings report from JP Morgan and data on inflation.

JPMorgan Chase reported a 34 percent jump in third-quarter profits as the largest U.S. bank made more home mortgage loans.

The earnings of both banks will be scrutinized for insight on the health of the financial sector and the economy as a whole. Both had been forecast to benefit significantly from a home loan refinancing boom.

"The banks are a huge part of what is going on - they have been trading below tangible book value, which means people don't believe what is on their books, so any time we get information on them, that could be a driver for the market," said Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh.

"So people are going to be analyzing the results from JP Morgan and trying to figure out if things in the economy are getting better or staying the same."

The benchmark S&P index has shed 1.9 percent so far this week, putting it on track for its worse weekly performance since a 3-percent drop in the week through June 3.

Weak global demand has heightened investor worry over the corporate earnings season. As a group, S&P 500 companies' third-quarter earnings are expected to fall 3 percent from a year ago, according to Thomson Reuters data, marking the first decline in three years.

U.S. producer prices rose more than expected in September as the cost of energy surged, a government report showed on Friday, but underlying inflation pressures were muted.

Advanced Micro Devices Inc dropped after the chipmaker said its third-quarter revenue likely fell 10 percent from the previous quarter as a weak global economy and a growing preference for tablets slams the PC industry.

European shares fell and looked set to end the week in negative territory but analysts said the market was not likely to witness a sharp sell-off.

Asian stocks steadied, but were on course for a losing week as worries about weak corporate earnings and slowing global economic growth limit the appeal of riskier assets.

Reuters contributed to this report.

Source: http://marketday.nbcnews.com/_news/2012/10/12/14392086-stocks-higher-after-robust-bank-earnings?lite

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