(Updates to early afternoon, changes byline)
By Kristina Cooke
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 [].
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 <> 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 <> 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 <>. 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 [].
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)
