North American stocks were on track to end a six-day losing streak on Friday after major indexes rebounded on a rally among U.S. financials and speculation that China will stimulate its economy after reporting weaker economic growth.
At noon, the Dow Jones industrial average was up 180 points or 1.4 per cent, to 12,753. The broader S&P 500 was up 18 points or 1.4 per cent, to 1,353. In Canada, the S&P/TSX composite index was up 72 points or 0.6 per cent, to 11,497.
U.S. financials were the strongest group within the S&P 500, rising 2.1 per cent following the release of quarterly earnings from JPMorgan Chase & Co.
While the bank said that its recent trading loss has ballooned to $5.8-billion (U.S.), more than double its first estimate, the bank nonetheless reported earnings of about $5-billion in the second quarter, or $1.21 a share. JPMorgan shares rose 5.5 per cent.
Although all 10 subindexes within the S&P 500 moved higher, economically sensitive sectors showed the biggest gains: industrials rose 1.7 per cent, materials rose 1.6 per cent and consumer discretionary stocks rose 1.4 per cent.
The gains come despite a weaker-than-expected reading on consumer confidence. The Thomson Reuters/University of Michigan consumer sentiment index fell to 72 from 73.2 in June.
As well, China reported that its economy slowed to growth of 7.6 per cent in the second quarter, at an annualized pace – below the 8 per cent threshold that has typically brought a stimulative response from policy makers.
In Europe, stocks also moved higher: The U.K.’s FTSE 100 rose 1 per cent and Germany’s DAX index rose 2.2 per cent.
Within Canada’s benchmark index, commodity producers showed some of the biggest gains, with energy stocks up 0.9 per cent and materials up 0.8 per cent. Financials rose 0.4 per cent.