* JPMorgan edges up after results, Wells Fargo lower
* Retail sales rise more than expected in December
* Intel rallies after upgrade, GameStop slumps on outlook
* Indexes up: Dow 0.6 pct, S&P 1 pct, Nasdaq 1.6 pct
By Ryan Vlastelica
NEW YORK, Jan 14 U.S. stocks rose on Tuesday,
erasing much of the previous session's steep drop, as December
retail sales rose more than expected and investors digested
earnings from major financial firms.
The S&P 500 suffered its biggest daily decline since Nov. 7
on Monday as investors exercised caution amid a ream of negative
corporate earnings outlooks that suggested the market may be
vulnerable with indexes near record levels.
Retail sales increased 0.7 percent in December, excluding
automobiles, gasoline, building materials and food services, a
rise that was bigger than anticipated. It was the first major
economic indicator since Friday's payroll report, which was
sharply under expectations.
"The retail sales are painting a better economic backdrop
than payrolls did, and investors are using recent weakness as an
opportunity to buy," said Mike Gibbs, co-head of the equity
advisory group at Raymond James in Memphis, Tennessee.
The S&P's forward price-to-earnings ratio is the highest in
nearly seven years, another sign investors may be more selective
as the U.S. Federal Reserve begins to slow its stimulus, which
contributed to massive gains in 2013.
Both JPMorgan Chase & Co and Wells Fargo & Co
posted earnings that beat expectations, though upside
was limited with Wells near all-time highs and JPMorgan at its
highest since 2000. JPMorgan gained 0.4 percent to $57.95 while
Wells was up 0.3 percent at $45.70. The S&P financial index
advanced 0.8 percent.
"Financials are putting up strong numbers, and we should be
able to put in a decent print this quarter, especially since
expectations have been trending down," said Gibbs, who helps
oversee about $450 billion in assets.
The Dow Jones industrial average was up 94.72 points,
or 0.58 percent, at 16,352.66. The Standard & Poor's 500 Index
was up 17.76 points, or 0.98 percent, at 1,836.96. The
Nasdaq Composite Index was up 63.88 points, or 1.55
percent, at 4,177.19.
Intel Corp shares jumped 3.8 percent to $26.47,
helping to boost the Nasdaq, after JPMorgan upgraded the stock
to "overweight" from "neutral."
With 5 percent of the S&P 500 companies having reported,
53.8 percent have beaten earnings expectations, according to
Thomson Reuters data, below the 63 percent historical average.
About 62 percent have beaten on revenue, above the long-term 55
Bank of America Corp, Citigroup, Goldman Sachs
and Morgan Stanley are scheduled to post results
later in the week. General Electric Co and Intel are also
In merger news after the market closed on Monday, Google Inc
agreed to buy smart thermostat maker Nest Labs Inc for
$3.2 billion. Charter Communications Inc
offered to buy Time Warner Cable for $37.3
Shares of Google rose 1.7 percent to $1,141.97, while Time
Warner Cable rose 2.8 percent to $136.06 and Charter added 1
percent to $135.55.
Both GameStop Corp and Stratasys Ltd
slumped after giving outlooks that were weaker than expected.
GameStop lost 18 percent to $37.01 as the S&P's worst performer,
while 3D printer maker Stratasys slid 9.3 percent to $117.96.
In contrast, Intuitive Surgical advanced 9.4
percent to $430.23 as the S&P's best performer after the
surgical equipment maker gave a strong fourth-quarter outlook.