* Indexes up: Dow 0.28 pct, S&P 0.06 pct, Nasdaq 0.12 pct
* Wells Fargo weighs on financials
* Consumer sentiment tops expectations
* AMD drops after revenue warning
By Chuck Mikolajczak
NEW YORK, Oct 12 (Reuters) - U.S. stocks rose modestly on
Friday after data showing consumer sentiment rose in October to
its highest in five years and inflation pressure remained in
check last month.
The positive economic data overshadowed a decline in shares
of the banking sector.
The Thomson Reuters/University of Michigan's preliminary
October reading on consumer sentiment rose to 83.1, well above
the 78 forecast for the index as optimism about the economy
A separate report showed producer prices rose a
steeper-than-expected 1.1 percent in September, but excluding
volatile food and energy costs, the Labor Department's Producer
Price Index was flat compared with August, indicating underlying
inflation pressures remained muted.
The data helped offset a drop in bank shares after earnings
from JPMorgan Chase & Co and Wells Fargo & Co.
JP Morgan, the largest U.S. bank, edged up 0.6 percent to
$42.37 after paring earlier gains. Wells Fargo, the biggest U.S.
home lender, dropped 2.5 percent to $34.40. The KBW Bank index
lost 1.2 percent.
Both banks benefitted significantly from a home loan
refinancing boom, but investors were disappointed revenue from
Wells Fargo came in shy of expectations.
The banks' earnings were expected to the primary factor for
Friday's market, but they were unexciting and yet stocks were
higher, said Stephen Massocca, managing director at Wedbush
Morgan in San Francisco.
"Probably (it's) the Michigan consumer sentiment. That was a
better-than-expected number. You had the unemployment claims
yesterday. You are starting to see some better economic data
percolate through," he said.
Massocca also cited the Federal Reserve's monetary policy as
a big driver as it is providing so much liquidity it makes "the
line of least resistance for all securities markets" upward.
The benchmark S&P index is down 1.7 percent so far this
week, putting it on track for its worst weekly performance since
a 3 percent drop in the week through June 3.
Weak global demand has heightened investor worry over
corporate earnings. As a group, S&P 500 companies' quarterly
earnings are expected to fall 3 percent from a year ago,
according to Thomson Reuters data, marking the first decline in
The Dow Jones industrial average gained 37.16 points,
or 0.28 percent, to 13,363.55. The Standard & Poor's 500 Index
rose 0.81 point, or 0.06 percent, to 1,433.65. The Nasdaq
Composite Index added 3.79 points, or 0.12 percent, to
Advanced Micro Devices Inc dropped 9.4 percent to
$2.90 after the chipmaker said its third-quarter revenue likely
fell 10 percent from the previous quarter as a weak global
economy and a growing preference for tablets slams the PC
U.S.-listed shares of STMicroelectronics
jumped 9 percent to $6.15 after Bloomberg reported Europe's top
semiconductor maker was considering a breakup that could lead to
the sale of its struggling mobile-phone chip business.
J.B. Hunt Transport Services jumped 7.1 percent to
$58.68 after posting quarterly earnings, lifting the Dow Jones
Transportation average to 1.2 percent. Many analysts had
recently noted the divergence between the transports and the
industrials as troubling sign for the markets.