U.S. stocks rallied Friday, with the Dow and S&P 500 snapping a six-day losing streak, as JPMorgan Chase reported stronger-than-expected second-quarter earnings despite a trading loss of $5.8 billion U.S. so far this year.
The Dow Jones Industrials zoomed 203.82 points, or 1.6%, to finish the week at 12,777.10
The S&P 500 added 22.01 points to 1,356.77. The Nasdaq Composite Index spiked 42.28 points to 2,908.47.
Shares of JPMorgan Chase soared almost 6%. In addition to earnings, JPMorgan also revealed that traders involved in the loss could lose as much as two years of income and that they no longer work at the bank.
Other major U.S. banks also rose on Friday. Shares of Bank of America, Morgan Stanley, Citigroup and Goldman Sachs were all up between 3% and 5%.
Wells Fargo posted earnings of 82 cents on $21.4 billion U.S. in revenue, on par with expectations. On Thursday, the Department of Justice announced the bank agreed to pay $175 million U.S. to settle allegations that it discriminated against minority borrowers. Shares rose more than 3%.
Global banking giant HSBC will face scrutiny on Capitol Hill on Tuesday over its allegedly lax protections against money laundering by organized criminals and terrorist groups. It''s not clear if or how much HSBC may be fined over its alleged lapses, though the Financial Times speculated that the bank could be on the hook for up to $1 billion U.S, citing analyst estimates.
Investors also reacted to comments from Federal Reserve Bank of Atlanta President Dennis Lockhart that stimulus action may be coming down the pike.
On Friday, Moody''s downgraded Italy''s government debt two levels, citing an increased likelihood the country will be slammed by higher borrowing costs. Yields on the Italian 10-year bonds rose at 6.06%.
But analysts say that it''s not all bad news for Italy, as an auction of three-year bonds sold at an average yield of 4.65%, down from 5.3% in mid-June.
Economically speaking, Washington reported prices in June rose by 0.1%, despite expectations that they would fall by more than half a percentage point.
The University of Michigan''s Consumer Sentiment Index for July fell to 72, from 72.2 the prior month. The reading was below expectations.
The price on the benchmark 10-year U.S. Treasury faded, pushing the yield up to 1.50% from Thursday''s 1.48%. Treasury prices and yields move in opposite directions.
Oil for August delivery gained $1.19 to $87.27 U.S. a barrel.
Gold futures for August delivery rose $26.70 to settle at $1,592.00 U.S. an ounce.
