Corporate optimism fuels rallying US stocks

US stocks rose for a seventh straight week, the longest rally since May 2007, buoyed by optimism about corporate earnings and European efforts to control the region's debt crisis.

JPMorgan Chase jumped 2.9 per cent as the lender posted record quarterly profit. Financial shares in the Standard & Poor's 500 Index climbed 3.2 per cent after Wells Fargo raised its rating for large banks on prospects for higher dividends.

Higher oil prices boosted energy shares, which climbed the most among S&P 500 groups.

The S&P 500 rose 1.7 per cent to 1293.24 in the five-day period ended January 14, the biggest gain in five weeks and its highest level since August 28, 2008. The Dow Jones Industrial Average added 112.62 points, or 1 per cent, to a 30-month high of 11,787.38.

The S&P 500 rallied after European actions to bolster the region's sovereign-bailout fund and Portugal's sale of government debt.

The start of the US earnings season helped overshadow economic data showing initial jobless claims rose more than estimated in the first week of the year and lower-than-forecast retail sales in December.

The benchmark index of US equities has soared 91 per cent from its March 2009 low amid government measures to stimulate the economy and corporate profits that beat predictions.

Analysts predict that earnings will increase 14 per cent this year, according to data compiled by Bloomberg News. Out of seven companies in the S&P 500 that have posted results since January 10, six have beaten analysts' per-share earnings estimates, according to data compiled by Bloomberg.

Financial shares had the second-biggest gain in the S&P 500 among 10 industries, rising 3.2 per cent.

- BLOOMBERG