Friday the 13th turned out to be a lucky day for stocks, with the Dow and S&P 500 snapping a six-day losing streak, propelled by sharp gains in financials following JPMorgan's earnings report.
With the day's rally, the Dow and S&P 500 managed to eke out small gains for the week.
“We’ve been vastly oversold,” said Art Cashin, director of floor operations at UBS Financial Services. “We see that this bounce could take us into the beginning of next week…but between now and Labor Day, things could get very volatile.”
The Dow Jones Industrial Average finished up more than 200 points, lifted by JPMorgan and BofA . H-P was the only laggard on the blue-chip index.
The S&P 500 and the Nasdaq also closed near session highs. The The CBOE Volatility Index, widely considered the best gauge of fear in the market, tumbled below 17.
For the week, the financials led the key S&P sector gainers, while techs ended lower.
“From here to the end of the year, we could see upside for equities—we still see positive growth in earnings for the full-year and sentiment is off-the-charts negative,” said Savita Subramanian, head of U.S. equity and quantitative strategy at BofA Merrill Lynch on CNBC's "Squawk on the Street." “So net-net, if we avoid a recession in the U.S., we could see positive returns for equities.”
Subramanian has a 1,450 year-end price target for the S&P 500.
JPMorgan Chase jumped after the financial giant beat Wall Street expectations, despite the $4.4 billion loss from the "London Whale" trading debacle. Still, the bank earned an overall profit of nearly $5 billion.
"We don't take it lightly," CEO Jamie Dimon told Wall Street analysts on a conference call of the trading loss. He added: "We're not making light of this error, but we do think it's an isolated event."
Other financials including BofA , Morgan Stanley and Goldman Sachs got a lift following JPMorgan's results.
Wells Fargo posted higher earningson strong mortgage banking income as borrowers continued to refinance their homes at low rates.
Lexmark plunged to lead the S&P 500 laggards after the printer maker cut its second-quarter outlook, citing impact from exchange rates and weak demand in Europe. Barclays lowered its price target on the company to $21 from $24. Rival printer makers Xerox and H-P also fell following the news.
Techs have been battered all week, following profit warnings and lowered forecasts from companies such as Applied Materials and AMD . Adding to woes, semiconductors took a beating after a report earlier this week showed spending will likely decline this year.
Even tech giant Apple was unable to pull off a gain for the week.
Green Mountain Coffee Roasters tumbled after Stifel Nicolaus cut its earnings estimate on the coffee company, citing increasing competition.
“What we’ve seen from company guidance suggests that stocks with more foreign exposure is starting to look riskier,” said Subramanian.
On the economic front, the Thomson Reuters/University of Michigan July preliminary consumer sentiment index fell to 72, hitting its lowest level since last December, after reaching 73.2 in the final June report.
Producer prices unexpectedly rose 0.1 percent in June despite big drops in energy prices, according to the Labor Department.
“If we see inflation figures in the 1.5 percent area in the next CPI report on Tuesday, there will be enough Fed members convinced to supply additional accommodation,” said Tom Graff, Partner at Brown Advisory & Portfolio Manager, adding that odds are “better than 50-50” for more QE.
China's economy grew 7.6 percent in the second quarter, its slowest pace in three years. While in line with expectations, China's latest report marks the nation's sixth-straight quarter of slowing growth, with the economy headed for its softest full-year growth since 1999.
In Europe, Moody's surprised markets by cutting Italy's credit ratingto two notches above junk status warning it could cut it further, adding pressure on the euro zone's third-largest economy.
—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
On Tap Next Week:
MONDAY: Retail sales, Empire state mfg survey, business inventories, Human Genome deadline for bids; Earnings from Citigroup, Charles Schwab, Gannett
TUESDAY: CPI, treasury int'l capital, industrial production, housing market index, Ben Bernanke speaks, Cleveland Fed Pres speaks, Google Ideas conf.; Earnings from Coca-Cola, Goldman Sachs, J&J, Mattel, Intel, Yahoo, CSX
WEDNESDAY: Weekly mortgage apps, housing starts, Ben Bernanke speaks, Fed's Beige Book; Earnings from BofA, Abbott Labs, Honeywell, PNC Bank, USBancorp., AmEx, IBM (tentative), Qualcomm, Ebay, Yum Brands
THURSDAY: Jobless claims, existing home sales, Philadelphia Fed survey, leading indicators; Earnings from Morgan Stanley, Novartis, Philip Morris, Travelers, Verizon, AutoNation, BB&T, Blackstone, Nokia, Southwest Airlines, Google, Microsoft, AMD, Capital One, Chipotle, ETrade, Sandisk
FRIDAY: Fender and Kayak trading debut; Earnings from GE, Schlumberger, Xerox
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