Wall Street flat as banks outperform; Boeing slumps

By Alison Griswold

NEW YORK (Reuters) - U.S. stocks were mostly flat in afternoon trading on Friday, helped by strong earnings from JPMorgan Chase and Wells Fargo, while shares of Boeing slumped after an airplane fire in London.

Boeing shares fell 5 percent to $101.50 after a Dreamliner operated by Ethiopian Airlines caught fire at Britain's Heathrow airport on Friday. Boeing accounted for 40 points of negative drag on the Dow industrials.

Dreamliner component manufacturers were also lower, including Honeywell International , off 0.6 percent, and Spirit Aerosystems , down 2 percent.

The S&P 500 industrial sector index fell 0.8 percent.

United Parcel Service also weighed on industrials and was the biggest loser in the S&P 500, sliding 5.8 percent to $86.13. The world's No.1 package delivery company said second-quarter profit would fall short of expectations. Rival FedEx Corp fell 2.3 percent to $102.04.

"UPS is contrary to most of the other indicators on the economy that we have seen," said Jim Awad, managing director at Zephyr Management in New York. "It's disappointing and bears watching as we work our way through the remainder of earnings season."

Financials were outperforming the broader market after JPMorgan Chase & Co , the largest U.S. bank by assets, reported a 31 percent jump in quarterly profits. The stock was up 0.3 percent at $55.31.

Shares of Wells Fargo & Co , the biggest U.S. mortgage lender, jumped 2.1 percent to $42.77 after posting quarterly results that topped expectations.

The Dow Jones Industrial Average was down 11.90 points, or 0.08 percent, at 15,449.02. The Standard & Poor's 500 Index was down 0.31 points, or 0.02 percent, at 1,674.71. The Nasdaq Composite Index was up 2.78 points, or 0.08 percent, at 3,581.08.

Both the Dow industrials and the S&P 500 closed at all-time highs on Thursday on reassurance from Federal Reserve Chairman Ben Bernanke that the U.S. central bank will keep monetary policy loose for some time.

Over the past three weeks, the benchmark S&P 500 has erased the nearly 6 percent selloff triggered by the Fed chairman in late May, when Bernanke first raised the prospect of trimming the central bank's $85 billion in monthly bond purchases.

The S&P 500 rose 3.8 percent over the previous six sessions, its best six-day run since early January and longest winning streak since early March. At midday, the benchmark index was up 2.6 percent for the week.

U.S.-listed shares of Infosys jumped 5.3 percent to $46.37 after the company reported quarterly results and maintained its revenue growth forecast.

Analysts expect S&P 500 companies' second-quarter earnings to have grown 2.8 percent from a year earlier, with revenue up 1.5 percent, data from Thomson Reuters showed.

The Thomson Reuters/University of Michigan's preliminary reading for July on the consumer sentiment index was 83.9, down from 84.1 in June and shy of forecasts for 85.

(Reporting by Alison Griswold; Editing by Jan Paschal and Nick Zieminski)