US STOCKS-Blue-chip earnings ignite Wall Street rally
(Updates to early afternoon, changes byline)
NEW YORK, April 16 (Reuters) - U.S. stocks rallied on Wednesday after Intel Corp (INTC.O), JPMorgan Chase & Co (JPM.N) and other blue chips reported earnings that reassured investors worried that a weak economy would sap corporate profits.
First-quarter results from JPMorgan, the third-largest U.S. bank, and Wells Fargo & Co (WFC.N) heartened investors who had been counting on the big banks to fare better than rivals in coping with the housing and credit markets turmoil. For details, see [ID:nN16378871].
The two banks had less exposure, relative to their size, to the risky mortgages and complex securities that have caused more than $200 billion of write-downs and credit losses at lenders worldwide since summer.
Technology stocks were also having a strong day after Intel, the world's largest chip maker and a Dow component, affirmed its profit-margin target for 2008, soothing investor concerns about falling memory chip prices and the impact of a severe economic slowdown.
"The fact that companies that are viewed as being higher quality, like JPMorgan and Intel, did not drop a negative surprise on the market is causing investors to cheer today," said Eric Kuby, chief investment officer at North Star Investment Management Corp. in Chicago.
The Dow Jones industrial average .DJI was up 168.70 points, or 1.36 percent, at 12,531.17. The Standard & Poor's 500 Index .SPX was 20.00 points, or 1.50 percent, higher at 1,354.43. The Nasdaq Composite Index .IXIC rose 49.98 points, or 2.19 percent, to 2,336.02.
Shares of JPMorgan shot up 3.9 percent to $43.78 on the New York Stock Exchange and ranked among the stocks giving the biggest boost to both the Dow and the S&P 500.
Shares of Wells Fargo climbed 3.7 percent to $28.82 after the No. 5 U.S. bank reported a narrower-than-expected decline in profit as solid revenue gains and lower expenses helped offset an increase in bad loans.
An S&P index of financial shares .GSPF rose 2.4 percent.
Intel contributed the most to S&P's advance, while it ranked second among the top-weighted stocks lifting the Nasdaq 100 .NDX. Intel's stock climbed 6 percent to $22.17 on the Nasdaq.
An index of semiconductor stocks .SOXX gained 5 percent.
Energy shares also gave a boost to the S&P 500 as the price of oil rose 1 percent to a record $115 per barrel. The S&P index of energy shares .GSPE was up 1.7 percent.
Adding to Wall Street's positive mood, the government said the overall Consumer Price Index for March rose less than economists had forecast as cheaper prices for clothing helped to offset a modest rebound in energy prices.
But the Federal Reserve said economic conditions were weakening across much of the United States while price pressures from food, fuel and raw materials were increasing.
And shares of apparel retailer Talbots Inc (TLB.N) sank 28.2 percent to $9.23 a day after the retailer said that two banks would no longer make letters of credit available to the company [ID:nN16340329].
The Dow Jones index of U.S. home builders .DJUSHB rose 3.7 percent even as housing starts fell in March to the lowest level in 17 years. (Editing by Kenneth Barry)
