Banks lead US stock gains as JP Morgan posts record profit

Jan 15, 2011, 17:22 GMT

New York - US stocks gained on Friday on the back of record profits from JPMorgan Chase, ending a strong week for investors on Wall Street.

JPMorgan, the second-largest US bank by assets, reported a 4.83- billion-dollar fourth-quarter profit, a 47-per-cent increase over the same period last year. The report led to a surge in financial stocks as it kicked off the quarterly reporting season for the big US banks.

The banking gains overshadowed a report on retail sales that disappointed some investors. The Commerce Department said retail sales climbed 0.6 per cent in December, the sixth straight monthly gain.

A separate report from the Labour Department found inflation climbed 0.5 per cent in December, more than expected due to rising energy prices, but remained at a decade-low for the year of 1.5 per cent. The core inflation rate, which excludes food and energy, was just 0.1 per cent on the month.

The blue-chip Dow Jones Industrial Average added 55.48 points, or 0.47 per cent, to 11,787.38. The broader Standard and Poor's 500 Index gained 9.48 points, or 0.74 per cent, to 1,293.24. The technology-heavy Nasdaq Composite Index climbed 20.01 points, or 0.73 per cent, to 2,755.3.

For the week, the Dow climbed 0.96 per cent, the S&P 500 surged 1.71 per cent and the Nasdaq jumped 1.93 per cent.

   The US currency dropped against the euro to 74.7 euro cents from 74.9 euro cents on Thursday. The dollar rose against the Japanese currency to 82.92 yen from 82.79 yen.