Stocks Finish Higher

Investors Thursday weighed JPMorgan's strong results against a decline in the Philly Fed index and a possible CIT bankruptcy

U.S. stocks closed higher Thursday as price drops earlier in the session led to late bargain hunting. Tech stocks gained ahead of earnings reports from IBM (IBM) and Google (GOOG) due after Thursday's close.

Financial stocks, however, underperformed, weighed down by money woes at CIT Group (CIT).

The firming in the market followed news of a 2-point rise in the National Association of Home Builders' housing market index. Earlier in the session, investors fretted over a mixed bag of earnings reports and economic data, which included factory activity in the Mid-Atlantic region and jobless claims.

Investors weighed a jump in second-quarter profits at JPMorgan Chase, disappointing results from Nokia (NOK), and a possible CIT Group bankruptcy.

On Thursday, the 30-stock Dow Jones industrial average finished higher by 95.61 points, or 1.11%, at 8,711.82. The broad Standard & Poor's 500-stock index gained 8.06 points, or 0.86%, to 940.74. The tech-heavy Nasdaq composite index added 22.13 points, or 1.19%, to 1,885.03.

Treasuries rose. The dollar index fell. Crude futures were mixed. Gold fell.

JPMorgan Chase & Co.'s (JPM) second-quarter earnings rose 36% on strong investment-banking results, with the profit smashing analysts expectations like Wall Street titan Goldman Sachs Group did Tuesday, the WSJ reported. Investment banking and a boom in mortgage refinancing were expected to help large U.S. banks offset rising losses from bad loans, but investors are looking for whether troubled loans will continue to rise and whether the refinance boom can last. Credit-loss provisions fell 3.6% from the first quarter for J.P. Morgan. Although its mortgage and credit-card businesses are being hurt badly by rising unemployment and the recession, its traditional Wall Street businesses are booming.

After nearly a week of intense negotiations with Obama Administration officials, small business lender CIT Group surprised Wall Street late on July 15 with news that there was "no appreciable likelihood" of immediate government aid and that it was "evaluating alternatives." With its own lenders pulling funding and its small business borrowers drawing down credit lines as fast as they could, CIT's inability to secure government help leaves the New York-based firm with few options other than bankruptcy.

American International Group (AIG) announced that it will accelerate steps to position American Life Insurance Company (ALICO) as an independent entity and seek an initial public offering and public listing in New York, depending on market conditions and subject to regulatory approval.

Nokia (NOK), the world's biggest maker of mobile phones, dropped as much as 9% in Helsinki trading after posting second-quarter earnings per share (EPS) of €0.15, vs. €0.37 one year earlier, on a 25% sales drop. Nokia also cut its forecast for market share and profitability because of competition in high-end handsets.

Former Treasury Secretary Henry Paulson will testify on the Bank of America-Merrill Lynch merger Thursday.

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