RPT-TOPWRAP 7-China, strong earnings fuel recovery hopes

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* U.S. Mid-Atlantic factory activity contracts

* Geithner signals U.S. to continue global stimulus push

* China Q2 growth quickens to 7.9 percent

* JPMorgan profits stronger than forecast (For more on the global crisis, click [nCRISIS])

By Matthew Robinson

NEW YORK, July 16 (Reuters) - Strong company earnings and economic growth in China lifted hopes for a global recovery as Treasury Secretary Timothy Geithner expressed confidence global financial markets were on the mend.

JPMorgan Chase & Co (JPM.N) topped Wall Street forecasts to report a 36 percent rise in quarterly profits and expectations for strong results from International Business Corp (IBM.N) helped lift U.S. markets higher after grim U.S. economic data weighed in earlier trading.

Global markets rose after data showed China's pace of economic expansion sped up to hit 7.9 percent in the second quarter, fueled by state spending and bank lending, reinforcing hopes it will lead the world economy out of its deepest recession in 80 years. For details, see [ID:nSP537798]

A business survey in Japan, the world's second largest economy, suggested demand for goods was rising after months of official efforts to pump stimulus money into boosting growth.

The positive news from Asia, helped support global stocks, with the MSCI World Index gaining 0.9 percent .MIWD00000PUS. European shares gained 0.4 percent to end at a one-month high.

Record investment banking fees helped drive a 36 percent rise in quarterly profit for JPMorgan Chase & Co, topping Wall Street forecasts, though the bank warned that credit quality in consumer mortgages and credit cards is deteriorating faster than expected. [ID:nN16416842]

Growing optimism about quarterly earnings pushed U.S. stock indexes higher in late trade [.N]. Earlier, Wall Street fell after the Philadelphia Federal Reserve Bank said factory activity in the U.S. Mid-Atlantic region posted a worse-than-expected decline in July, contracting for the 10th consecutive month.

The Fed report showed the region's business activity index -- potentially the most closely-watched U.S. regional manufacturing reading -- dropped to minus 7.5 in July from minus 2.2 in June, below analysts' forecasts for a reading of minus 5.0. [ID:nN16411053]

Other U.S. data was mixed, with the U.S. Labor Department showing the number of Americans lining up for jobless benefits last week hitting the lowest level since January, although the drop was seen as distorted by upheaval in the auto industry. [ID:nN16256518]

IBM reported a 13 percent fall in revenue after the stock market close, but outperformed expectations due to cost cutting and a shift to more profitable businesses. [ID:nN16369660]