US STOCKS-Banks lead markets up in rebound from recent losses

* State Street jumps on earnings outlook

* Crude oil rebounds on inventory optimism

* Family Dollar’s forecast weighs on retailers

* Indexes up: Dow 1.5 pct, S&P 500 1.6 pct, Nasdaq 1.4 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to afternoon trading)

By Ryan Vlastelica

NEW YORK, July 7 (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) advanced more than
1 percent on Wednesday, rebounding from recent losses as a
bullish earnings forecast from State Street Corp (STT.N: )
encouraged investors going into the earnings season.

Equities have been pressured in recent weeks, with the Dow
down seven of the past eight sessions as concerns persist about
the strength of the global economy.

“We were deeply oversold and thus were due for a healthy
bounce like this,” said Quincy Krosby, market strategist at
Prudential Financial in Newark, New Jersey.

Krosby noted that markets gained more than 1 percent in
Tuesday’s session, though they later pared those gains to close
only modestly higher.

“If we end higher today, that will give us a clue as to
whether this rally is just a bounce, or a prelude to more
sustainable gains,” she said.

Institutional investor State Street rose 9.4 percent to
$36.45 after it forecast second-quarter operating earnings that
were sharply above expectations. For details, see
[ID:nN07140060]. Major company quarterly earnings reports begin
in earnest next week.

The KBW bank index (.BKX: ) climbed 3 percent, while State
Street rivals Northern Trust Corp (NTRS.O: ) rose 4.7 percent to
$48.11 and Bank of New York Mellon Corp (BK.N: ) was up 5.3
percent to $26.05.

“Having a bank give this kind of preannouncement is very
encouraging, and it’s giving a more positive tone to the market
in general,” said Jack Ablin, chief investment officer at
Harris Private Bank in Chicago.

The Dow Jones industrial average (.DJI: ) was up 145.69
points, or 1.50 percent, at 9,889.31. The Standard & Poor’s 500
Index (.SPX: ) was up 16.22 points, or 1.58 percent, at 1,044.28.
The Nasdaq Composite Index (.IXIC: ) was up 28.49 points, or 1.36
percent, at 2,122.37.

Energy shares were also among the day’s gainers as August
crude futures advanced 2.4 percent to $73.69 per barrel,
sending the S&P energy index (.GSPE: ) up 1.9 percent.

Crude climbed on the expectation that upcoming data would
show a drop in U.S. inventories, a positive sign for demand, as
well as weakness in the U.S. dollar. [ID:nSGE666059]

The fall in the dollar “suggests that risk is coming back
into the market a little bit,” Krosby said.
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For a Reuters insider video on a technical view of the S&P
http://link.reuters.com/tec36m
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UBS lowered its full-year forecast on the S&P to 1,150 from
1,350. The firm said the reduced view reflected modestly weaker
earnings growth and longer-term secular headwinds.
[ID:nSGE6660I3]

In earnings news, Family Dollar Stores Inc (FDO.N: ) tumbled
8.6 percent to $36.05 after it forecast fourth-quarter earnings
below expectations. [ID:nSGE6660EP]

Among its discount retailer peers, Dollar Tree Inc (DLTR.O: )
slipped 2.9 percent to $41.66 while BJ’s Wholesale Corp (BJ.N: )
was off 1.8 percent at $42.42.

BP Plc (BP.L: )(BP.N: ) Chief Executive Tony Hayward met with
officials from Abu Dhabi’s investment authority as speculation
mounted the sovereign fund would make a fresh investment. BP’s
U.S.-listed shares rose 2.4 percent to $32.66.
(Reporting by Ryan Vlastelica; Editing by Kenneth Barry)

US STOCKS-Banks lead markets up in rebound from recent losses