US STOCKS-Wall St set to open 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: Dow down 4 pts, S&P up 0.25 pts, Nasdaq up 14.75
(Adds details, comment, updates prices)

By Tanya Agrawal

July 14 (Reuters) – U.S. stocks looked set to open slightly
higher on Friday as June consumer price index data indicated
benign inflation that could test Fed’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
were lower in premarket trading, after the banks
released mixed earnings reports.

Analysts estimate second-quarter earnings for 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.

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

“While the economy is growing, there is still some room to
run,” said J.J. Kinahan, chief market strategist at TD

“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

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.

Dow e-minis were down 4 points, or 0.02 percent,
with 17,277 contracts changing hands at 8:39 a.m. ET (1239 GMT).

S&P 500 e-minis were up 0.25 points, or 0.01 percent,
with 102,371 contracts traded.

Nasdaq 100 e-minis were up 14.75 points, or 0.25
percent, on volume of 25,803 contracts.

Data showed that in the 12 months through June, the consumer
price index (CPI) increased 1.6 percent – the smallest gain
since October 2016 – after rising 1.9 percent in May.

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, dampening expectations of strong
acceleration in economic growth in the second quarter.

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.

Yellen said the central bank’s further rate hikes could be
gradual, given persistently low inflation and that it would be
“quite challenging” for U.S. growth to reach a 3-percent target
set by President Donald Trump.

(Reporting by Tanya Agrawal; Editing by Arun Koyyur)