* Obama meets with Senate Republicans at White House
* Energy sector up after rules on ethanol loosened
* JP Morgan, Wells Fargo slip after posting earnings
* Indexes: Dow up 0.08 pct, S&P flat, Nasdaq up 0.1 pct
By Julia Edwards
NEW YORK, Oct 11 U.S. stocks edged up in choppy
trading on Friday following the biggest rally in more than nine
months as both sides in Washington worked for a solution to a
possible U.S. default and an end to a partial government
Uncertainty about whether progress will be made over the
weekend could be contributing to Friday's caution. Signs of a
potential short-term deal emerged on Thursday, boosting stocks,
but no agreement has yet been reached.
President Barack Obama will press his case for a quick
reopening of the entire federal government, coupled with a
short-term increase of U.S. borrowing authority to avoid a U.S.
default, when he meets with Senate Republicans on Friday.
In return, Republicans want Obama to commit to broader
deficit reduction steps after the current standoff is settled.
Energy stocks led the S&P 500 index, up 0.5 percent,
after the Environmental Protection Agency proposed lowering the
required amount of ethanol to be blended into U.S. gasoline
after Thursday's market close on Thursday.
Tesoro led energy stocks, rising 4.2 percent to
$45.38 despite a report by Reuters on Thursday that a Tesoro
pipeline spilled more than 20,000 barrels of crude oil onto a
North Dakota farm.
Investors looking to buy may also buy energy stocks, which
have cheapened of late. Energy is one of three S&P sectors that
have lost ground in the last month.
"Exxon and Chevron were trading near lows of
the year.... Everybody's looking at, 'What can I buy?'" said
Dennis Dick, proprietary trader at Bright Trading LLC in Las
U.S. crude futures were on track for the largest
weekly percentage decline in three weeks due to the fiscal
standoff in Washington.
The Dow Jones industrial average rose 49.84 points,
or 0.33 percent, to 15,175.91, the S&P 500 gained 2.84
points, or 0.17 percent, to 1,695.4 and the Nasdaq Composite
added 6.728 points, or 0.18 percent, to 3,767.475.
The partial government shutdown is now in its eleventh day
and less than a week remains before an Oct. 17 deadline to
extend the government's borrowing authority and avoid a debt
default. The crisis in Washington threatens to damage the fiscal
standing of the United States.
The Thomson Reuters/University of Michigan index of consumer
sentiment fell in October to its weakest in nine months and was
"For as much uncertainty that is out there, this market
doesn't seem very scared. Since the financial crisis, every time
you've bought dips, you've been rewarded," said Dick.
The S&P financial index slipped 0.3 percent after
earnings reports from JP Morgan Chase & Co, which was
down 0.1 percent at $52.42, and Wells Fargo & Co, which
fell 0.76 percent to $40.66. Wells Fargo was the biggest drag on
the S&P 500.
JP Morgan, the biggest U.S. bank by assets, reported a rare
quarterly loss after incurring $9.2 billion in legal expenses.
Excluding litigation expense and reserve release, it earned a
profit of $5.82 billion, or $1.42 a share.
Wells Fargo & Co, the biggest U.S. mortgage lender,
reported a 13 percent rise in third-quarter profit, but its
mortgage banking income fell sharply as the refinancing boom
began to fade.
Retail apparel chain Gap was down 2.7 percent to
$36.74 a day after reporting net sales were flat compared with