Wall Street inches higher as bank stocks bounce back

By Sruthi Shankar

REUTERS - U.S. stocks crept up in late morning trading on Monday as surging Treasury yields led to a rebound in bank stocks after three straight days of losses.

The benchmark 10-year Treasury yields jumped after Federal Reserve Chair Janet Yellen reaffirmed the central bank's view on gradual interest rate hike and a stronger-than-expected U.S. business conditions index.

JPMorgan and Bank of America rose about 1.5 percent, leading the gainers on the S&P financial index.

Reactions to bank results, which topped earnings estimates last week, were tepid on concerns about credit card losses and weak trading activity across the sector.

"The market is going higher despite all the news flow of geopolitical events," said Jeff Zipper, managing director at the U.S. Bank Private Client Reserve in Palm Beach, Florida.

"There is optimism on earnings, economic indicators hopes of budget resolution."

The Senate is trying this week to pass a partisan budget blueprint that would help guide federal spending.

Republicans want to use the "budget resolution" to pave the way for the party later this year or next year to pass a major tax-cut bill without any Democratic support.

Of the S&P 500 companies, 55 are expected to report this week. Out of the 32 that have reported so far, 84.4 percent beat earnings expectations, according to Thomson Reuters data.

At 11:02 a.m. ET (1502 GMT) the Dow Jones industrial average was up 31.82 points, or 0.14 percent, at 22,903.54, the S&P 500 was up 1.87 points, or 0.07 percent, at 2,555.04 and the Nasdaq Composite was up 14.47 points, or 0.22 percent, at 6,620.27.

Seven of the 11 major S&P sectors were higher, led by 1.3 percent gain in the telecom services index.

Sectors considered as bond proxies including real estate and utilities were down about 0.3 percent. Apple gained 1.3 percent, providing the biggest boost to the Nasdaq and the S&P after KeyBanc upgraded the stock to "overweight".

World stocks and commodities got a boost from upbeat Chinese data on Monday, while U.S. oil futures jumped to a near six-month high as escalating tensions between the Iraqi government and Kurdish forces threatened supply.

Adobe slipped 2.4 percent after Deutsche Bank cut rating on the Photoshop maker's stock to "hold".

Groupon rose 3.67 percent after brokerage Cowen and Co upgraded the daily deals website operator's stock to "market perform".

Freeport-McMoran gained 2.54 percent as copper prices broke through the $7,000-a-tonne mark for the first time in three years, helped by Chinese data.

Video-streaming pioneer Netflix, which reports third-quarter results after market, fell 0.40 percent.

Investment banks Goldman Sachs and Morgan Stanley will report before markets open on Tuesday.

Declining issues outnumbered advancers on the NYSE by 1,396 to 1,341. On the Nasdaq, 1,450 issues rose and 1,314 fell.

(Reporting by Sruthi Shankar in Bengaluru; editing by Saumyadeb Chakrabarty and Arun Koyyur)