US STOCKS-Wall St edges higher as data dims rate hike chances

* JPMorgan, Wells Fargo, Citigroup lower after quarterly

* June CPI comes in below expectations

* Retail sales falls for second straight month in June

* Indexes up: Dow 0.05 pct, S&P 0.14 pct, Nasdaq 0.35 pct
(Updates to open)

By Tanya Agrawal

July 14 (Reuters) – U.S. stocks were slightly higher at the
open on Friday as June consumer price index data indicated
benign inflation that could test the Federal Reserve’s resolve
to raise interest rates for a third time this year, while
investors parsed earnings reports from big banks.

Shares of JPMorgan Citigroup and Wells Fargo
, which have run up in the past few weeks, were lower as
their earnings reports failed to excite investors.

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

“Companies that miss or just meet expectations or if they
don’t give post strong forecasts, will be punished by
investors,” said J.J. Kinahan, chief market strategist at TD

“While the economy is growing, there is still some room to
run. People are waiting to hear from CEOs to see if they’re
optimistic for the rest of the year. Given where valuations are
right now, some sell off in the market won’t be bad in the short

The financial index fell 1.15 percent and was the
only laggard among the 11 major S&P sectors.

Analysts estimate second-quarter earnings for the S&P 500
companies rose 7.8 percent from a year earlier, with financials
projected to have had the third-best profit growth among
sectors, 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 9:41 a.m. ET (1341 GMT), the Dow Jones Industrial Average
was up 9.98 points, or 0.05 percent, at 21,563.07, the
S&P 500 was up 3.63 points, or 0.14 percent, at 2,451.46.

The Nasdaq Composite was up 16.27 points, or 0.26
percent, at 6,290.71.

Ten of the 11 major S&P sectors were higher, with the
utilities index’s 0.83 percent rise leading the

Data showed that in the 12 months through June, the consumer
price index (CPI) increased 1.6 percent – the smallest gain
since October 2016. Economists polled by Reuters had forecast
the CPI climbing 1.7 percent from a year ago.

Other data showed retail sales unexpectedly fell in June for
a second straight month.

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

Risk sentiment got a boost this week, with the Dow hitting
another record close on Thursday, following dovish comments on
interest rate hikes from Federal Reserve Chair Janet Yellen.

Advancing issues outnumbered decliners on the NYSE by 1,767
to 792. On the Nasdaq, 1,192 issues rose and 1,123 fell.
(Reporting by Tanya Agrawal; Editing by Arun Koyyur)

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