Global Networks: Wells Fargo

#GNN - U.S. stocks have been on a roll of late, with the S&P 500 hitting the latest in a series of records on Thursday, and investors expect the index's momentum to soon carry it to - if not far past - the 2,000 milestone.

The S&P is about 10 points, or 0.4 percent, from that landmark, which analysts expected would be reached toward the end of the year, according to the most recent Reuters poll. Reaching it ahead of schedule is the latest affirmation that stocks are widely preferred to bonds, even with further upside seen as limited as the Federal Reserve remains on track to end its bond-buying stimulus program in October..

The level has more psychological than fundamental significance, and it could prompt market participants to consider whether their holdings have become stretched.

The "2,000 (level) has no fundamental significance outside of suggesting that stocks are fully valued and getting more so all the time," said David Joy, chief market strategist at Ameriprise Financial in Boston. "We should see some weakness as Fed policy winds down, but I'd still rather own stocks than bonds, as in the long run they'll continue to expand."

The S&P is up 7.8 percent this year, outpacing overseas indexes and shrugging off headwinds such as a weather-depressed first quarter and political unrest abroad. Both defensive and cyclical stocks have led at times, but traders expect technology and healthcare names, the market's current leaders, to drive it over 2,000.

"Now is not the time to seek out value over growth," said Jeff Mortimer, director of investment strategy for BNY Mellon Wealth Management in Boston. "Price momentum tends to have stickiness in this kind of market."

Every S&P sector is positive year-to-date, with tech and healthcare both up about 13 percent, eclipsing the 11 percent rise of utilities, the previous leader.

Despite record levels and the lack of any sustained pullback since 2012, investors are finding reasons to buy, with U.S. stock funds getting $9.9 billion in inflows last week, according to Thomson Reuters' Lipper service.

Only two of the 27 industry groups that Wells Fargo monitors are down from 12 months ago, a breadth that leads to year-over-year gains 90 percent of the time, the firm wrote, with the S&P rising an average of 12.7 percent.

Optimism about near-term market direction hit a nine-month high in the latest AAII Sentiment Survey, with 46.1 percent of respondents expecting gains over the next six month.

"There's a good underlying tone in the market and we still have plenty of prospects for more gains," said Michael Mullaney, chief investment officer at Fiduciary Trust Co in Boston.

He added that he would not be concerned about valuation until the S&P's forward price-to-earnings ratio was 17 and its trailing P/E was 20. Those metrics currently stand at 15.7 and 17.4, respectively.

(GNN)(Reuters)(Reporting by Ryan Vlastelica.; Editing by Andre Grenon)

(GNN) - JPMorgan Chase & Co JPM.N, the biggest U.S. bank by assets, said on Tuesday that second-quarter profit fell 8 percent after customer stock and bond trading volume dropped and mortgage lending fees plunged.

The results were not as bad as investors had feared, and the bank's shares rose 4.2 percent to $58.67 in early trading.

Chief Executive Jamie Dimon said the bank had seen "encouraging signs" across its businesses toward the end of the quarter, including businesses drawing more from credit lines. But the bank's executives also sounded notes of caution, noting that it was "too early to assume that this momentum will continue."

Speaking on a conference call with analysts, Dimon said that companies are still not stepping up capital spending. On a conference call with reporters, Chief Financial Officer Marianne Lake said the pickup in bond trading revenue that the bank saw in June has not continued through July.

The report is the bank's first since Dimon disclosed that he had throat cancer.

Dimon told reporters on Tuesday, "I feel great," and added that he would stay engaged with the business as he underwent treatment. He said for the first time that he was advised to take a few weeks of rest after his eight weeks of treatment.

The bank's net income fell to $5.99 billion, or $1.46 per share, from $6.5 billion, or $1.60 per share, in the same quarter of 2013. Revenue fell 3 percent to $24.45 billion.

Analysts on average had expected earnings of $1.29 per share, according to Thomson Reuters I/B/E/S.

Revenue from fixed-income and equity markets fell 15 percent to $3.5 billion in the quarter ended June 30 compared with the same quarter last year, but the drop was less than the 20 percent decline that JPMorgan had forecast in May.

Investors had broadly expected trading revenue drops in the 20-percent range for the big banks, but stronger activity in June helped dampen the declines that banks posted. Goldman Sachs Group Inc GS.N posted a 10 percent decline in stock and bond trading revenue for customers, excluding a business it sold last year.

Citigroup Inc C.N, which reported on Monday, said income from stock and bond trading fell 15 percent, excluding an accounting adjustment - well below the 20-25 percent fall it had braced the market for in May.

JPMorgan executives have said that institutional investors seem to be shying away from bonds because of a lack of strong opinions about future moves in interest rates and currencies.

MORTGAGE LENDING DROPS

JPMorgan, the second largest U.S. mortgage lender after Wells Fargo & Co WFC.N, said its profit from mortgage lending fell 38 percent to $709 million, while mortgage application volumes dropped 54 percent to $30.1 billion.

Overall U.S. mortgage demand has fallen for more than a year as mortgage rates have risen. Demand for loans was also hit by a weaker spring selling season compared with last year.

JPMorgan said total assets at end-June stood at $2.52 trillion, up from $2.48 trillion at the end of March.

(GNN)(Reuters)(AIP)(Reporting by David Henry and Tanya Agrawal; Editing by Ted Kerr and Phil Berlowitz)