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US: Stocks gain as bank earnings boost confidence

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[NEW YORK] US stocks were higher in morning trading on Friday, boosted by bank stocks after better-than-expected quarterly profits from Bank of America, Wells Fargo and JPMorgan, which bode well for the rest of the earnings season.

Bank of America jumped 2.1 per cent to US$23.41, their highest since the financial crisis. JPMorgan surged 2.2 per cent at a record high of US$88.17 and Wells Fargo gained 3.1 per cent to US$56.20.

Seven of the 11 major S&P sectors were higher, with the financial index's 1.04 per cent rise leading the advancers. The KBW Bank index was up 2 per cent, set for their best day since Dec 1.

The combined profit of S&P 500 companies is estimated to have risen 5.7 per cent in the fourth quarter, largely helped by financial companies, according to Thomson Reuters I/B/E/S. "There is a lot of optimism regarding the financial sector but any kind of cautious statement from them might cause a bit of a pullback," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida. "All the changes that are being proposed for the sector are going to take some time, it's not going to happen right away."

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At 9:37 a.m. ET (1437 GMT) the Dow Jones Industrial Average was up 52.59 points, or 0.26 per cent, at 19,943.59.

The S&P 500 was up 5.77 points, or 0.25 per cent, at 2,276.21 and the Nasdaq Composite was up 22.46 points, or 0.4 per cent, at 5,569.95.