US STOCKS-Wall St at record as data dulls rate hike chances

* JPMorgan, Wells Fargo, Citigroup lower after quarterly
results

* June CPI comes in below expectations

* Retail sales falls for second straight month in June

* Indexes up: Dow 0.14 pct, S&P 0.26 pct, Nasdaq 0.41 pct
(Updates to early afternoon)

By Tanya Agrawal

July 14 (Reuters) – U.S. stocks were trading at record
levels in early afternoon trading on Friday, as weak economic
data dimmed chances of another rate hike this year and tech
stocks gained.

A rise in Microsoft and Apple lifted the
S&P and the Nasdaq, with the technology index rising
0.63 percent.

However, tepid forecasts by JPMorgan and Wells Fargo capped
gains.

Shares of JPMorgan fell 1.5 percent, Citigroup
was down 1 percent and Wells Fargo fell 1.9 percent,
despite their quarterly profits beating analysts’ expectations.

The financial index fell 0.92 percent and was the
only laggard among the 11 major S&P sectors.

Bank of America, Goldman Sachs and Morgan
Stanley will report results next week.

“The bar for earnings is higher this time around, especially
after the phenomenal growth we saw in the first quarter. So
companies that miss expectations or guide down will be overly
punished,” said Michael Scanlon, portfolio manager at Manulife
Asset Management.

Bank of America was the biggest drag on the S&P and Goldman
Sachs shaved off 16 points from the Dow.

Analysts estimate second-quarter earnings for the S&P 500
companies rose 8.1 percent from a year earlier, after first
quarter earnings posted their best performance since 2011,
according to Thomson Reuters I/B/E/S.

Earnings will be closely watched to see if high valuations
are justified in the face of tepid inflation and a recent patch
of mixed economic data.

The S&P 500 has been trading at about 18 times earnings
estimates for the next 12 months, compared with the long-term
average of 15 times.

At 12:39 p.m. ET (1639 GMT), the Dow Jones Industrial
Average was up 29.96 points, or 0.14 percent, at
21,583.05. It hit a record of 21596.13.

The S&P 500 was up 6.58 points, or 0.26 percent, at
2,454.41, slightly easing from its all-time high of 2455.43.

The Nasdaq Composite was up 25.56 points, or 0.41
percent, at 6,300.00.

Ten of the 11 major S&P sectors were higher, with defensive
sectors such as real estate, utilities and
consumer staples leading the advancers.

Data showed consumer prices were unchanged in June and
retail sales fell for a second straight month, pointing to tame
inflation and subdued expectations of strong economic growth in
the second quarter.

Chances of a rate hike in December fell to 47 percent after
the release of data points, from 55 percent at Thursday’s close.

Earlier this week, Federal Reserve Chair Janet Yellen said
future rate hikes could be gradual in the face of persistently
low inflation.

Advancing issues outnumbered decliners on the NYSE by 2,015
to 793. On the Nasdaq, 1,533 issues rose and 1,217 fell.
(Reporting by Tanya Agrawal; Editing by Arun Koyyur)

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